Toyota Caetano Portugal, S.A.

Annual Report • Mar 22, 2019

Report & Accounts December 2018

Corporate Bodies

General Meeting Board

José Lourenço Abreu Teixeira - Chairman Manuel Fernando Monteiro da Silva - Vice Chairman Maria Olívia Almeida Madureira - Secretary Jorge Manuel Coutinho Franco da Quinta - Secretary

Board of Directors

José Reis da Silva Ramos - Chairman & CEO Maria Angelina Martins Caetano Ramos - Member Salvador Acácio Martins Caetano - Member Miguel Pedro Caetano Ramos - Member Matthew Peter Harrison -Member Katsutoshi Nishimoto - Member Rui Manuel Machado de Noronha Mendes - Member

Supervisory Board

José Domingos da Silva Fernandes - Chairman Alberto Luis Lema Mandim - Member Daniel Broekhuizen - Member Maria Lívia Fernandes Alves - Alternate

Statutory Auditor

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. represented by José Miguel Dantas Maio Marques António Joaquim Brochado Correia - Alternate

SINGLE MANAGEMENT REPORT

Message from the Chairman

2018 was a year of round-figure anniversaries at Toyota Caetano Portugal, accompanied by expressive business results. Toyota has reached half a century of existence in our country, since it was first represented by the Salvador Caetano Group. The brand's presence in Portugal is inseparable from the history of Portuguese society and, 50 years later, we can confirm that "Toyota is here to stay." Lexus also deserves our congratulations for celebrating its 20th anniversary, which confirms the maturity achieved by the brand in Portugal. But challenges never end, and each passing year brings reviews and new targets.

Today we are faced with the most informed and demanding customers that the automotive sector has ever known, and they are the ones who stimulate us every day, with new trends and consumption patterns. It is for them that we develop new mobility solutions and invest in digital channels so that, supported by the know-how of our professionals, we can make them happy and satisfied Customers.

The new consumer profile and the growth of digital media also pose new challenges to after-sales services. Therefore, our strategy is to actively invest in the construction of solid, customeroriented relationships, creating value at every stage of the business relationship.

In Portugal, 2018 was marked by a context of relative political and socio-economic stability and maintenance of the Portuguese confidence indexes, which allowed us to enjoy a safe and consumption-prone environment. It is, however, necessary to be prudent and moderate, because we don't live alone in the world. In this regard, from the legislative point of view, it is important to ensure adequate conditions for companies to pursue their business, so they can gain the confidence of national and international investors. Changes to the law and tax and labour schemes often prevent businesses from meeting their budgetary targets and goals, thereby compromising their credibility in the eyes of those who invest in them. The automotive sector has a pressing need for support by the Portuguese government, which should avoid increasing the tax burden and adjust taxation and incentives for the purchase of environmentally friendly vehicles. This is not just a commitment of the automotive sector, but of society as a whole.

The Portuguese automotive market has been consolidating its growth in recent years. In 2018 there was a growth of 3% compared with the same period last year. With regard to Toyota's commercial activity, we witnessed a 15% increase in sales compared to 2017, totalling 11,920 vehicles sold. The brand's market share stood at 4.5%, representing a change of 0.5 percentage points compared with the previous year. As for Lexus, 560 vehicles were sold, corresponding to an increase of 24% compared with 2017 and a market share of 0.2%. These good results are largely due to a team of people committed to their mission and to the brand's objectives.

As for industrial activity, 2,114 units of the Toyota Land Cruiser model were manufactured at the Toyota Caetano plant in Ovar in 2018. The investment in this model, geared to the South African market, has proven to be quite satisfactory, with a sustained growth year after year. The Industrial Equipment Division sold 739 pieces of equipment, from forklift trucks to warehouse equipment, also showing good results.

The path that is being followed by the automotive sector faces transformations and demand required by an increasingly digital and environmentally-driven market. The investment in clean mobility solutions is a certainty and a duty of the brands, as the European Union's emissions standards are increasingly on the side of those who assert themselves in the manufacture of vehicles run on alternative fuels, a reality in line with the strategy adopted by Toyota over two decades ago. In fact, both Toyota and Lexus have been examples of this for several years, concentrating efforts to create increasingly advanced vehicles and a better society. The goal is to contribute to a more sustainable planet by addressing environmental challenges such as global warming, air pollution, as well as limited natural resources and energy supply.

At a time when diesel vehicle sales are dropping, in Portugal hybrid vehicles accounted for more than half of Toyota's light vehicle sales and 100% of Lexus' this year.

This is further proof that the brand is at the forefront of development, making efforts to encourage a more widespread use of zero-emission electric and hydrogen-powered vehicles. In 2018, in Lisbon, Toyota received the Energy Observer, the world's first self-sufficient, hydrogen-powered vessel, at the same time as the brand announced a partnership with CaetanoBus for the manufacture of Toyota hydrogen-powered buses.

All these efforts by Toyota have led the brand to be publicly recognised worldwide, ranking 8th in Fortune's Change the World list. It was also considered by Reader's as one of the Most Trusted Brands in Portugal in 2018, in the Environment category, for the 9th consecutive year.

Sustaining our social and environmental responsibility policy, at the end of the year we inaugurated Bosque Ser Caetano, a space where Toyota occupies a prominent place, marking the 50th anniversary of the brand in Portugal. This space seeks to address the challenges of a greener and more environmentally friendly society, as well as to creation and leisure area for the Employees of the Salvador Caetano Group, to which Toyota Caetano Portugal belongs.

The numbers and facts with which the history of Toyota Caetano Portugal is being written prove its ability to adapt to new challenges and new realities. A company with sustained and responsible growth, which creates value in all its businesses, always looking to the future. We reaffirm our commitment to maintaining the solid relationships we have built over the years with our Partners, Clients and Employees.

José Ramos (Chairman & CEO Toyota Caetano Portugal)

Introduction

According to the provisions of Article 245(1)(a) of the Securities Code, we have prepared the management report and the profit application proposal presented below, as well as the corresponding Notes, in compliance with the provisions of Article 447 of the Commercial Companies Code. For each of the Companies included in Toyota Caetano Portugal's scope of consolidation, a list of the main events that occurred during the period under review and their impact on the financial statements will be presented.

TOYOTA CAETANO PORTUGAL, S.A.

Industrial Activity

Ovar Manufacturing Unit

In 2018, as part of its main activity, the Ovar Plant manufactured a total of 2114 units of the Land Cruiser 70. In the second half of the year, there was an increase in the number of units ordered, which allowed for an increase of 11% in the number of units produced compared to the previous year, a figure lower than initial forecasts.

In 2018 the Factory started installing Robots in the Welding process. This project is in line with Toyota's vision for Ergonomics and Safety, as it allows releasing employees from the most physically demanding tasks.

Safety is a key pillar for Toyota and the Ovar Plant, as it is increasingly relevant to ensure the healthy ageing of the working population.

In the PPO/PDI activity, 3,776 vehicles were transformed/prepared, a result that is slightly higher than that achieved in the same period of the previous year.

We should highlight that the TCAP HUB was created in the 2nd Semester, via the unification of the management of PPO/PDI activities, new and used vehicle park at the Ovar Plant.

PRODUCTION		2018 2017 2016 2015 2014
Toyota Physical Units		2,114 1,913 1,823 1,629 1,664
Physical Units		3,776 3,469 3,773 4,353 3,271
Transformed/prepared
Total Employees	194		177	206 170

We also highlight the following events occurred in 2018:

• Transition of the TCAP Management System - Ovar Plant for the 2015 edition of the ISO 9001 Quality standard and the ISO 14001 Environmental standard;

• Factory hosting TME's QCC Working Group quarterly meeting;

• Integration of the CaetanoBus electric chassis line into our facilities;
• 5th Facilities Assessment and 1st Risk Assessment, carried out by TME;
• Open Day in partnership with AIDA (Industrial Association of the District of Aveiro);

Future Prospects

For 2019 we expect the production volume of Activity LC70 (2,170 units) to stabilise, leading to possible changes in the daily production rate.

Commercial Activity

Light Vehicles Market - Framework

2018 showed growth when compared to 2017, with a 3% increase, thus totalling 267,596 vehicles sold.

Passenger vehicles and light commercial vehicles showed a positive trend when compared to the same period of the previous year, with a positive variation of 3% and 2%, respectively.

Source: ACAP (Portuguese Automobile Trade Association)

We should point out, as explanatory factors for the market's performance:

• 1) In 2018, Portugal achieved positive figures in the main macroeconomic indicators, with particular emphasis on GDP and public consumption.
• 2) The growth of the rent-a-car market also contributed to the positive result achieved in passenger vehicles.

Toyota Vehicles

In 2018, Toyota sold a total of 11,920 vehicles, which represents an increase of 15% when compared to the previous year.

This growth is sustained by an increase in sales in both Light Passenger and Commercial Vehicles, with particular emphasis on the former.

(1) In Light Passenger Vehicles,Toyota grew by around 18%, with a market share of 4.4% (+0.6 p.p. vs 2017).

This performance is the result of a substantial increase in sales of hybrids (+ 55% vs. 2017), with particular emphasis on the C-HR model.

The increase in the brand's sales in the rent-a-car market also helped the growth of the Light Passenger vehicle market.

(2) In Light Commercial Vehicles, Toyota shows a slight increase of approximately 1%, with its market share remaining at 4.8%.

With regard to Light Commercial vehicles, highlight goes to Hillux, which ends 2018 leading the pick-up segment.

Toyota Evolution: 2017 vs 2018

We should highlight the strong competitive pressure felt in the B (utility) & C (small family) segments, with aggressive promotional campaigns throughout the entire year.

For 2019, the overall priorities and goals set include:

• Capitalising on the most representative models in terms of sales - Yaris, Corolla, RAV4 and C-HR;

• Launching New Products (RAV4, Corolla Range, Camry )

• Enhancing sales to corporate customers (the most representative segment in the automotive market);

• Continuing to focus on the brand's image and value via the innovative Hybrid technology;

• Continuing to promote the commercial range, recently renewed with the introduction of different variants of the Proace and Hilux models.

Premium Market - Framework

The Premium Market showed a negative trend compared to the previous year, with a decrease of 8% and totalling 47,569 units sold. The Premium Market represents nearly 18% of the total of the passenger market.

Premium Market Development

Source: ACAP (Portuguese Automobile Trade Association)

Lexus Vehicles

Lexus Evolution: 2017 vs 2018

In a complex competitive environment, with a strong commercial aggressiveness between competitors in the C-Premium segments, the Lexus brand continues its upward trend, showing a remarkable 24% increase. In 2018, Lexus registered 560 license plates, which correspond to a 1.2% share in the premium market (+0.3 p.p.).

The performance of the models with the greater volume - IS, NX and CT - was crucial for the increase in Lexus sales in 2018.

For 2019, the overall goals set include:

• Strengthening the brand's innovative position, leveraged by a broad and exclusive offer of hybrid vehicles with an advanced design;

• Launching new products: new ES 300h and new UX 250h;

• Capitalising on the most representative models in terms of sales - CT 200h, IS 300h and NX 300h:

— Expanding the dealership network, which will have new points of sale and assistance.

Toyota and Lexus Electric Hybrid Vehicle Sales - Evolution

In 2018, we should, once again, highlight the performance of the Toyota and Lexus hybrid models, which showed 51% growth compared to 2017. Electrified vehicles already accounted for 60.6% (+13.3 p.p. vs. 2017) of Toyota and Lexus passenger vehicle sales.

This performance was due to a broad and renewed offer of hybrid vehicles, corresponding to a total of 16 models - 7 Toyota and 9 Lexus - and to the focus on disseminating and promoting the benefits of hybrid technology.

Source: ACAP (Portuguese Automobile Trade Association)

Future Prospects

For 2019 we expect the sale of hybrid vehicles to keep growing at a substantially higher rate than that of the market.

In 2019, all macroeconomic indicators are expected to show a positive trend compared to 2018.

In view of this scenario, the Market forecast for 2019 suggests 1% growth compared to the previous year, corresponding to approximately 272,000 vehicles sold:

As a result of the conditions described above, the target for 2019 is 12,630 Toyota and Lexus units, representing an increase of 1% compared to 2018 and resulting in a market share of 4.6%.

After-Sales

The After-Sales Division billed a total of 37.8 million euros in 2018. This figure includes the "Warranty Extension" and "Total Assistance" services, whose turnover this year amounted to about 1.8 million Euros.

The commercial parts activity (genuine & national incorporation), which excludes accessories, warranties and services, amounted to approximately 28.3 million Euros. This amount represents growth of 3.0% compared to 2017.

Sales of Spare Parts 2017	Sales of Spare Parts 2018	Growth % 2018/2017
27.5 €	28.3 €	3.0%

In turn, turnover in accessories (which includes merchandising) amounted to 3.5 million euros in 2018. These sales were 8.7% higher than the figures achieved in the previous year, while implying growth in the incorporation per new vehicle sold.

In a market that is constantly evolving, with the rolling stock still in decline as a result of the recent crisis, TCAP reinforced its commitment to a world-class service to face daily challenges. We continue to develop and strengthen a fully customer-oriented strategy (360%), to boost our results. In this context, several entrepreneurial actions were carried out during 2018, of which we highlight:

• · New edition of the annual VCI (Value Chain Index) challenge for the year 2018. This initiative encourages every Toyota dealer to achieve good performances in some of the indicators seen as strategic for the After-Sales business. These indicators include: proactive customer warning programmes, the active reception process, customer retention services (insurance, warranty+extension,...), promoting the sale of accessories and implementing services for hybrid vehicles.
• · New edition of the Toyota Hybrid Service Programme, with a new communication plan and marketing actions reinforcing the innovative choice, confidence in the professionals and low maintenance costs.
• · Relaunch of the Toyota On-The-Spot Check-Up Service adjusted to new premises that improve the convenience of this service for Customers.
• · New behavioural training module for Reception teams, gearing their actions towards optimising the Customer's experience.
• · Launch of new maintenance contracts for the new Proace Verso launched in mid-2018.
• · Launch of new Genuine Toyota parts (HB3 xenon lamps, new cabin filters, reconditioned AD motors ... ).
• · Launch of activated carbon filters and EGR valves for Lexus models, offering competitive alternatives to the market.
• · New Merchandising products, with the launch of new collections such as Toyota Olympics, Toyota Gazoo Racing WRC and the Hilux and Land Cruiser lines.
• · Systematisation of Tire Campaigns, with competitive offers and logistics adjusted to the Customer's interests

The effectiveness of the aforementioned actions contributed toward improving retention rates as well as Customer Recommendation rates in 2018.

Industrial Machines

Toyota Industrial Equipment

	MARKET		TOYOTA + BT SALES
		·17 .18	Variation	'17		.18		Variation
			%	QTY	Share	QTY	Share	%
Counterbalanced Forklit Trucks	1634	1841	13%	329	20.1%	302	16.4%	-8.2%
Warehouse Equipment	2434	2818	16%	695	28.6%	437	15.5%	-37,1%
TOTAL MMC	4068	4659	15%	1024	25.2%	739	15.9%	-27,8%

Source : Wits

Market

The Cargo Handling Machine market showed 15% growth in 2018.

Regarding Toyota, 739 orders were placed in 2018, which represents a 15.9% market share in a total market of 4,659 vehicles.

Toyota Sales Performance by Segment

Regarding the Counterbalanced Forklift Trucks segment, there was an 8.2% decrease compared to the same period of the previous year, placing our market share at 16.4%.

In the Warehouse Equipment segment, there was a 37.1% decrease, placing our market share at 15.5%. This decrease is justified, on the one hand, by an increasingly aggressive competition and, on the other hand, by the fact that there were no large fleet businesses, which have a major impact on this segment.

Future Prospects

In view of the current economic climate, as well as of the economic growth forecasts for 2019, we believe that the market will continue to grow, but at a much more moderate pace.

Regarding Toyota's performance, a challenging year is expected, as the aggressiveness of competing brands has been significantly growing.

Our goal is to differentiate ourselves from our competitors by maintaining a good assistance service level and by creating and presenting innovative offers so that we can gain new customers and consolidate our performance and results.

CAETANO AUTO, S.A.

According to the Bank of Portugal, the Portuguese economy is expected to pursue a growth trajectory between 2018-21, despite a slowdown, in line with projections of the European Central Bank (ECB) for the euro area as a whole. Also, in line with this projection, the gross domestic product (GDP) is expected to grow by 1.8% in 2019.

The external environment of the Portuguese economy is also expected to remain relatively favourable. On the other hand, international trade is expected to show an evolution that is closer to that of world GDP, entailing relative stability in the growth of external demand aimed at Portugal in 2019. Accordingly, the projections point to 3.7% growth in exports in 2019.

In this context and in the vehicle sales area, Caetano Auto invoiced in 2018, 11,321 vehicles, of which 5,510 were new and 5,811 were used. We should highlight the importance of the used vehicle business, on the one hand, due to the materiality of the turnover achieved and, on the other hand, for being a channel that enables customer acquisition, as the first Toyota or Lexus purchase is often one of our used vehicles.

In workshop services, and despite the downsizing of the car fleet in recent years, Caetano Auto's financial statements for 2018 recorded turnover of more than 17 million euros in this activity, which includes mechanics and Caetano Glass, as private label for car glass repair and replacement, plus collision in claim repair.

In 2018, Caetano Auto sold its investment properties located in Castro d'Aire and Obidos, and also entered into promissory purchase and sale agreements for the decommissioned facilities of Viseu.

Also, in 2018. Caetano Auto invested approximately 2 million euros in the acquisition of facilities for its activity in Maia, Gondomar, and Caldas da Rainha.

As a result of the favourable development of the Portuguese economy, particularly of the sector in which it operates, Caetano Auto was able to develop its commercial activity in perfect conditions, obtaining operating profits that are hitting record highs. By 2019 and in light of the prospects for the Portuguese economy as a whole, we believe that our activity and its results will stand at least at the level achieved this year, helping the Toyota Caetano Group to further strengthen its position.

CAETANO AUTO CV, S.A.

Economic Environment Indicator *

According to the latest economic survey, the growth rate in Cape Verde continued to accelerate in the third quarter of 2018, standing above the average for the series and showing positive developments compared to the same quarter last year. With regard to outlet sales, the National Statistical Institute (INE) concluded that the confidence indicator maintained the upward trend of recent quarters, reaching the highest value of the last 66 consecutive quarters and developing positively compared to the same period of 2017.

The economic climate in the sector was favourable in the third quarter, marked by financial difficulties and insufficient demand as the main constraints.

The tourism sector also remained on an upward trend since the last quarter, standing above the average for the series.

In what is considered the driving force of the Cape-Verdean economy, entrepreneurs mentioned insufficient demand and difficulties in finding appropriately trained personnel as the main obstacles.

Another service that also maintained an upward trend in the third quarter was transportation and ancillary transport services, which recorded the highest value of the last 27 consecutive quarters and improved favourably compared to the same quarter last year.

The economic climate in this sector is favourable, but financial difficulties in obtaining bank loans are seen by entrepreneurs as the main constraints they are currently facing. On the other hand, construction maintained the downward trend seen in the last several quarters, standing below the average for the series and showing negative developments compared to the same quarter last year; however, the economic climate is regarded as favourable.

As regards civil construction, Cape-Verdean entrepreneurs mentioned the high interest rates and the excessive bureaucracy and state regulations as the main constraints of the sector.

As we've mentioned before, as Caetano Auto CV is a company operating in the transportation sector, its activity reflected the favourable conditions of the Cape-Verdean market, as shown below:

Commercial Activity

Vehicles

		2017	2018	Variation
SEGMENT	BRAND			Qty.	%
Light-Duty Passenger Vehicles	Toyota	62	88	+26	+41.94%
Light Commercial Vehicles	Toyota	295	295	0	0%
Heavy Commercial Vehicles	Toyota	27	34	+7	+25 93%
		384	417	+33	+8.59%

In comparison with the previous year, Caetano Auto CV, SA sold a further 33 units, equivalent to a growth of 8.6% in new vehicles.

As shown in the table above, the most significant growth occurred in the passenger vehicle seqment, where we should note the introduction of a new model - Toyota Rush - at the end of the year. Positive developments in heavy-duty vehicles were mostly associated with the Coaster model. In the light commercial vehicle segment, despite the difficulties caused by the legal changes regarding the use of these vehicles in the taxi industry, we were able to sell the same number of units as last year.

After-Sales

			Variation
TURNOVER	2017	2018	Value	%
Parts/Accessories	143,730	166,360	22,630	15.74%
Workshop (Labour)	36,739	43,623	6,883	18.73%
	180,469	209,983	29,513	16.35%

(Values in mECV)

With regard to After-Sales, there was an increase in turnover compared to the previous year. The increase in the sale of parts and accessories also corresponded to an increase in the services rendered mainly in the sale of labour in cases of collision.

For all these reasons, this associate in Cape Verde was able to achieve positive results, in line with those achieved in previous periods, while showing an upward trend.

Future Prospects

For the next fiscal year, a 5.5% increase in the sale of new cars and an increase of more than 20% in the After Sales business volumes are expected.

These figures are the result of favorable macroeconomic forecasts for Cape Verde, which will decisively influence the activity of this subsidiary in 2019.

CAETANO RENTING, S.A.

The Caetano Renting fleet is sustaining an upward trend, reaching an average of 3,550 units, and achieving a maximum of 4,520 units in July.

This increase was mainly due to the supply of vehicles for the rent-a-car business, which continues to be the segment with the greater weight in our activity, which is around 71% of the total fleet.

In line with the previous years, we continued to rent industrial machines, which represent 20% of the total operational fleet.

As a logical consequence of the above, there was also an increase in Turnover, which, in this financial year, reached an unprecedented amount of 10.3 MEuros, representing an increase of 43.07% over the same period last year.

The results of this subsidiary also positively reflected the increase achieved in terms of activity.

Future Prospects

For 2019, and in view of some changes in the mobility strategy developed by the Toyota and Lexus brands, we expect a slight decrease in activity, which will not jeopardize this subsidiary's profitability.

Financial Activity

Consolidated analysis

As the Portuguese motor vehicle market as a whole showed a slight growth in 2018, the Toyota Caetano Group was able to reach a turnover of 447 million euros, a figure 57 million euro higher (+ 14,6%) than the one obtained in the corresponding period of 2017.

Vehicles with hybrid technology (Yaris, Auris, CHR, RAV 4,...) contributed greatly to this growth, proving to be a strong driver of this good performance, as they represented more than half of the total sales of Toyota vehicles in our country.

Following the strategy we outlined a few years ago, it was possible for us to keep the trade margins on our products, a fact that, together with an ongoing and careful management of resources and costs, enabled us to increase our EBITDA by approximately 9 million euros, 25% more than in 2017, reaching an annual total of approximately 43 million euros in 2018.

On the other hand, and in terms of financial results, it was possible to reduce costs, as a result of appropriate negotiations with the banks, despite an increase in indebtedness, which is justified by the aforementioned growth of the activity and the adequacy of our average stocks.

Additionally, we believe we should mention the success obtained in the issuance of the Toyota Caetano 2018 Debenture Loan, in the amount of 12.5 million euros, which allowed us to achieve an adequate structure in debt due dates and, consequently, a reduction in the pressure of the cash flows for the next few years.

We should note that our degree of Financial Autonomy, standing at 43.1%, once again demonstrates that we've been managing our capital structure in an appropriate way, without ever calling into question the due remuneration of the shareholder investment, and, therefore, in this report, we present a proposal for a dividend distribution similar to that of the previous years.

In order to further detail our remarks on the Toyota Caetano Group's activity and performance, we present the following table with comparative indicators in thousands of euros:

	Dec 17	Dec 18	Variation
Turnover	390.035	446.875	14,60%
Gross Profit	72.088	81 214	12,70%
% (f) sales	18,50%	18,20%
External supplies and services	43.230	42.314	-2,10%
% (f) sales	11.10%	9,50%
Staff expenses	38.635	41 164	6,50%
% (f) sales	9.90%	9.20%
E.B.I.T.D.A.	34.040	42.561	25,00%
% (f) sales	8,70%	9,50%
Operating income	15.429	19.137	24,00%
% (f) sales	4.00%	4.30%
Net financial income	-2.575	-1.503	41,60%
% (f) sales	-0.70%	-0.30%
Consolidated net profit for the year	9 431	12.873	36.50%
% (f) sales	2.40%	2,90%
Net Bank Credit	62.671	73.929	18,00%
Level of financial autonomy	44.30%	43,10%

Although the industry estimates point to a stabilisation in 2019, we expect the Toyota Caetano Portugal Group to continue following an upward trend, with an emphasis on the Hybrid segment, which is expected to strengthen its sustainability on the market. In this regard, there will also be a strong investment in the resurgence of the Corolla name, as it has been our best-selling model since it was introduced in 1966.

Risk Management

Loans and advances to customers

Toyota Caetano's credit risk is mainly associated with loans to customers, related to its operating activity.

The main goal of Toyota Caetano's credit risk management is to ensure the effective collection of the operating receivables from its Customers, according to the negotiated payment terms.

In order to mitigate the credit risk resulting from the potential customer-related defaults on payments, the Group's companies exposed to this risk have:

• A specific Credit Risk analysis and monitoring department;

• Proactive credit management procedures that are implemented and always supported by information systems;

• Hedging mechanisms (credit insurance, letters of credit, bank guarantees, etc).

Interest Rate Risk

As a result of the relevant proportion of debt at variable rate in its Consolidated Balance Sheet, and of the subsequent interest payment cash flows, Toyota Caetano is exposed to interest rate risk.

Toyota Caetano has been using financial derivatives to hedge, at least partially, its exposure to interest rate variations.

Exchange Rate Risk

As a Group with geographically diversified commercial relationships, the exchange rate risk is mainly the result of commercial transactions, arising from the purchase and sale of products and services in a currency that is different from the functional currency of each company.

The exchange rate risk management policy seeks to minimise the volatility of the investments and operations denominated in foreign currencies, contributing toward reducing the sensitivity of the Group's results to exchange rate fluctuations. The Group's exchange rate management policy is focused on a case-by-case assessment of the opportunity to hedge this risk, taking into account, particularly, the specific circumstances of the currencies and countries in question.

Toyota Caetano has been using financial derivatives to hedge, at least partially, its exposure to exchange rate variations.

Liquidity Risk

The goal of Toyota Caetano's liquidity risk management is to ensure that the company has the ability to obtain, in a timely manner, the necessary funding to be able to undertake its business activities, implement its strategy and meet its payment obligations when due, while avoiding the need to obtain funding under unfavourable terms.

For this purpose, the Group's liquidity management involves the following aspects:

• a) A consistent financial planning based on operating cash flow forecasts for different time horizons (weekly, monthly, annual and multi-annual);
• b) The diversification of funding sources;

c) The diversification of the maturities of the debt issued in order to avoid excessive concentrations of debt repayments in short periods of time;

d) The arrangement of committed (and uncommitted) credit facilities, commercial paper programmes, and other types of financial operations with relationship Banks, ensuring the right balance between satisfactory liquidity levels and adequate commitment fees.

For detailed information, please refer to the Corporate Governance Report.

Own Shares

The company did not purchase or sell any own shares during this fiscal year. On December 31st, 2018, the company did not hold any own shares.

Non-financial report

Description of the corporate model

In line with the diagnosis of the needs of its stakeholders, Toyota Caetano Portugal has been prioritising the implementation of an ethics and transparency policy over the years, achieving its sustainability strategy through socially- and environmentally-aware management.

During 2018, the implementation of the outlined strategy is clearly evident in the primary actions planned and in the results obtained:

• As part of its Integrated Quality and Environment Management System, we highlight the internal and external audits performed (certifying entity - SGS), maintaining the certifications according to the ISO 9001:2015 and ISO 14001:2015 standards with zero non-conformities.

• Integrated in the Management System, Toyota Caetano Portugal has been reinforcing its continuous improvement strategy (kaizen), namely the level 1 daily kaizen (team organisation), the level 2 daily kaizen (55) and kaizen suggestions (ideas/projects implemented by employees).

Employees receive annual recognition of the continuous improvement results from the Administration.

• Working with hybrid and plug-in vehicles gives us the opportunity to make a difference on our planet. It is the right thing to do and also an opportunity to promote positive change, as the world looks for new ways of using energy and managing natural resources. That is why Toyota Caetano Portugal remains committed to taking a significant step towards reducing its environmental footprint, particularly with the "Toyota 2050 Environmental Challenge" program.

• For the fifth consecutive year, Toyota Caetano Portugal has participated in the annual report on Sustainable Development "Carbon Disclosure Project"(CDP), promoting corporate transparency and calculation of the company's carbon footprint. The result achieved in 2018 was A-Leadership.

The hybrid and plug-in vehicle massification strategy within the domestic market has greatly contributed to this CDP result, where we have achieved an excellent 60.6% hybrid vehicle sales ratio over the passenger vehicle sales total.

The energy efficiency actions implemented in the buildings and processes were also subject to significant improvements.

Biodiversity is closely related to Climate Change, as there is sufficient evidence to show that Climate Change can accelerate the disappearance of certain species. Sustaining our social and environmental responsibility policy, at the end of the year we inaugurated Bosque Ser Caetano, a space where Toyota occupies a prominent place, marking the 50th anniversary of the brand in Portugal. This space seeks to address the challenges of a greener and more environmentally friendly society, welcoming all Toyota Caetano Portugal Employees.

We also carried on the "One Toyota, One Tree" Programme which has been allowing Toyota to contribute toward making Portugal greener since 2015, offering Nature a tree for each vehicle sold. This Programme has been developed and growing so as to allow us to increasingly contribute in a sustainable way over time for the recovery of burnt, vacant, and arid lands, based on a careful selection of certified plants and forest shrubs, in harmony with the biodiversity of each area designated for planting. We've planted 136,000 trees since 2005, of which about 8,000 were planted in 2018 in the Estrela Mountain Range.

2019 Commitments

To continue sustainable growth in hybrid and plug-in vehicle sales, for which we draw a 70% penetration objective over the passenger vehicle sales total.

To continue with an employee daily focus on the Kaizen principle (continuous improvement), where we aim at an objective of 1.5 ideas per employee.

To achieve a renewal of the Management System Certification, according to the new ISO 9001:2015 and ISO 14001:2015 standards. To reinforce the risk-based philosophy, according to the FMEA (Failure Mode and Effects Analysis) methodology.

To endorse the "BSCD Charter of Principles" in order to further develop the guiding principles of sound business management in accordance with ethical, social, environmental and quality standards applicable in any context of the global economy. To, accordingly, strengthen our commitment to the vision outlined in the United Nations Sustainable Development Goals.

To continue to meet the international investors' demand for transparency in Toyota Caetano Portugal's low carbon economy the Carbon Disclosure Project (CDP), and to maintain the "Management level."

To reinforce the implementation of biodiversity programmes integrated into the Bosque Ser Caetano programme and the One Tree campaign, with the participation of various stakeholders.

Report on social issues regarding workers

DPC Activity

Since the People, Brand and Communication Corporate Division was created, in 2015, we have been constantly working with the firm and clear purpose of making Toyota Caetano Portugal an increasingly pleasant place to work, live and grow, based on an integrated People management system, which is in line with our organisational values and culture.

In 2018, we focused on strengthening and promoting our value proposition as employers, in order to attract the best professionals to the Toyota and Lexus brands and retain them. We believe that this commitment is essential to strengthening the "human pillar" in the mission of offering our customers memorable experiences in their relationship with our brands, as well as the continued growth of the organisation. Only in this way can we add the human capital that is ideal and necessary to pursue our business and customer satisfaction. At the same time, the consolidation of processes, the development of tools and the revision of procedures, in harmony with the RGPD, were at the heart of our concerns.

From the operational point of view, we continued to dematerialise and digitise our processes, developing new tools and interactive platforms. In this context, we should highlight the improvements to the Employee Portal, which have made it more effective, comprehensive, and intuitive.

We consolidated our organisational model for talent mapping, with the aim of aligning our Employees' expectations in terms of performance and career management with the strategic goals for our business. The functional description was organised and standardised according to the requirements of the function and conditions indexed to progression. In this context, the Performance and Development Management (GDD) system and the outlining of a skill and talent matrix have allowed an alignment of conditions and benefits, to guide the development of the Toyota Caetano Portugal Employees' careers, offering a broad view of the paths they can follow. The implementation of all these processes, which are becoming increasingly agile and interconnected, help us to monitor and anticipate trends in people management, an area that is constantly evolving and changing.

Corporate communication and internal marketing cut across all we've mentioned. These areas support the sharing of knowledge between Employees, in different cooperation and learning moments and experiences. Several events, such as the futsal tournament and get-togethers throughout the year, are some examples of that. Sessions aimed at raising awareness of new business models and work dynamics based on innovative and disruptive technologies that meet new trends in the sector are also a paradigm when it comes to sharing the ideas, experiences and visions of several different stakeholders.

In line with the major challenges we've mentioned, we have been developing an Employer Branding strategy, underpinned on a large scale by the development of a talent attraction and retention portal, which aims at activating recognition and preference for the company as an employer brand. The young talent attraction programme, subject to a strategic revision and reorientation, as well initiatives on social media aimed at attracting talent, have contributed to that. The Study on Ser Caetano no Dia-a-Dia Values, focused on Toyota Caetano Portugal Employees, allowed assessing their cultural alignment. Its development and implementation resulted in the outlining of a specific action plan for the Company.

On the other hand, the Training Centre has been focusing on expanding its offer of vocational courses for young people, coordinating with the ongoing Staff Training in technical and crosscutting skills, as well as in the development of exponential leadership. The Training Centre has shown sustained growth. In 2018, there was a total of 37 training courses for young people, attended by 721 trainees. There was a total of 15,093 Employee training hours.

We ended 2018 pursuing an old ambition and embracing a new challenge in the area of sustainability and social responsibility: the inauguration of Bosque Ser Caetano, a space where every Employee can get together and come into contact with nature.

Last, but not least, we should mention the ongoing implementation of good Kaizen practices, to inspire a culture of continuous improvement arising from the Employees' suggestions and contributions.

Year after year, we continue to invest in the integrated management of our talent, believing that only with a strategy aimed at attracting, developing and retaining differentiating profiles can we meet the challenges posed by the business and the new social dynamics.

Equality between men and women

Toyota Caetano Portugal remains focused on promoting gender equality, valuing technical skills and attitude, regardless of gender, as well as the respective reward. Since we operate in an industry that has been historically male-dominated and given that the company believes in the richness of gender diversification, it is increasingly committed to hiring women for areas and roles where they are under-represented and to raising awareness among female students about the fields of technology and engineering.

Non-discrimination

Toyota Caetano Portugal rejects all attitudes and behaviours that promote discrimination. So, it will operate in the market with an upstanding, honest attitude, with respect for all, promoting a friendly and dignified work environment, while acting as an active promoter of equal opportunities and moral integrity among all the stakeholders.

Respect for Human Rights

Inspired by the Toyota Way, which lives in harmony with Ser Caetano, Toyota Caetano Portugal bases its practice on the defence of Human Rights and respect for that reason, discriminatory behaviours based on race, ethnicity, social origin, age, gender, ideology, political opinion, religion or any physical or social condition are not allowed. In addition to being a clear objective and a purpose for its existence, TCAP is also focused on expanding these practices to its relationships with its stakeholders, namely its Employees, so that these are integrated into their personal relationships.

Diversity

Toyota Caetano Portugal promotes diversity, from its management to its governing bodies. The company is concerned with the renewal of its senior management, as it regards age as synonymous with experience and knowledge and the necessary qualifications as key for the performance of duties. These dimensions underpin the development of a sustainable strategy. In this context of diversity, women are increasingly being entrusted with leadership positions in the Organisation. Women and young people are also encouraged to take part in recruitment and training, as a way of promoting intergenerational debate and learning. Supported by these practices of gender diversity and intergenerational sharing, TCAP stands as a company prepared to meet the challenges of an increasingly global and inclusive world.

Fighting corruption and attempted bribery

Toyota Caetano Portugal requires careful, responsible weighting of every topic that could reflect the Values and Professional Ethics assumed by the Group. At every one of our companies, we acknowledge the importance of always bearing in mind the principles whereby it is governed while guiding our strategy and the way these shall be internalised and actually put into practice by every employee.

These rules contribute toward consolidating the image and role of Toyota Caetano Portugal and toward strengthening trusting relations with all stakeholders, including shareholders, employees, service providers, government bodies, regulators, local communities, customers, suppliers, competitors and the media.

Toyota Caetano Portugal has always been, is and will be in the market with integrity, honesty and respect for everyone we relate to. All of the Group's employees, regardless of the duties they perform, not only abide by their duty to observe applicable laws, but also regulate their conduct bearing in mind these basic principles.

Likewise, employees need to refrain from using the Group's assets to benefit themselves or any third parties.

All employees regulate their actions through strict compliance with the responsibilities they have been assigned, by performing their duties by strictly complying with what constitutes the description of such actions, while observing they have rightfully been given by their superiors and shouldering the consequences of their actions or omissions in carrying on the operations they have been entrusted with.

Employees use the power they have been delegated, in a weighted and non-abusive manner, always considering the company's interests and the pursuit of its objectives, namely safeguarding Toyota's assets.

On the other hand, employees shall encourage team spirit, while showing solidarity with the decisions that are made, acting with transparency, precision and truthfulness, avoiding any conflicts of interest and attitudes that could affect the image of both the company of which they are part and Toyota.

Toyota Caetano Portugal's corporate practices are transparent and equitable, and no active or passive bribery, corruption or influence peddling shall be tolerated.

The Group's employees shall refuse any offers that could be considered or construed as an attempt to influence the company or the employee. When in doubt, employees shall notify their immediate superiors, in writing, of the situation.

Likewise, no employee may offer any gift or other benefit that could be perceived as an attempt to influence a current or future decision-making process, or as a reward regarding a decision that has already been made. When in doubt, employees shall notify their immediate superiors, in writing, of the situation.

Employees shall act with independence, impartiality and the Group and within the margin of either their own or third-party interests. As part of this:

• a) Employees shall refrain from intervening or influencing in making decisions that could be related to people to whom they are or have been linked by bonds of kinship or to entities with which they collaborate or have collaborated.
• b) Involvement in activities that could compete or interfere with Group company activities and, in the case of a potential conflict of interest, employees and service providers shall forthwith notify their immediate superior thereof, in writing.

Employees are under obligation to protect the confidentiality of business information to which they have access as part of the positions they hold, namely as concerns the Toyota Caetano Portugal Group and its customers and suppliers, and no type of internal knowledge shall be used for personal gain. Compliance with the duty of confidentiality, as well as professional secrecy itself, shall remain in place even after expiry of the term, termination of the employment relationship or the provision of services.

To whom it may concern

b)

C)

We hereby declare, under the terms and for the purposes of Article 245(1)(c) of the Securities Code that, as far as we are aware, the individual and consolidated statements of Toyota Caetano Portugal regarding 2018 were prepared in accordance with the relevant accounting standards, providing a true and fair view of the assets and liabilities, financial situation and results of this company and other companies included in its consolidation perimeter, and that the management report contains a faithful account of the business evolution, performance and position of this company and of the subsidiaries included in its consolidation perimeter, as well as a description of the main risks and uncertainties they face.

Proposed Appropriation of Profits

In accordance with Article 376(1)(b) of the Commercial Companies Code, we propose the following appropriation of profits for the year, in the amount of 12.786.758,79 Euros, expressed in Toyota Caetano Portugal's individual financial statements:

a) For non-distributable reserves account for profits in financial holdings arising from the application of the equity method.

	Eur	2.295.779,83
For dividends to be attributed to capital, €0.20 per share, which, for 35,000,000 shares, amounts to a total of
	Eur	7.000.000.00
The remainder for the Retained Earnings account	Eur	3.490.978.86

Other Issues / Acknowledgements

From the end of 2018 to the present date, there were no relevant events worthy of mention.

We would like to end this report with a word of thanks:

• · To our Customers and Dealers, for their permanent trust in our products and for the distinction of their choice;
• · To the Banking Entities, for the collaboration and support they have always shown while following up our business;
• · To the other Corporate Bodies for always showing their cooperation;
• · To our Employees who, with their availability and enthusiasm, have committed themselves to the development of the Company.

Vila Nova de Gaia, March 20, 2019

The Board of Directors

José Reis da Silva Ramos – Chairman Maria Angelina Martins Caetano Ramos Salvador Acácio Martins Caetano Miquel Pedro Caetano Ramos Matthew Peter Harrison Katsutoshi Nishimoto Rui Manuel Machado de Noronha Mendes

INFORMATION ON THE PARTICIPATION OF THE MANAGING AND SUPERVISORY BOARDS OF TOYOTA CAETANO PORTUGAL, S.A.

(as per article 447 of the Companies Code and according to Article 9(d) and Article 14(7), both of Regulation 5/2008 of CMVM)

In compliance with the provisions of Article 447 of the Companies Code, it is hereby declared that, on 31 December 2018, the members of the Company's management and supervisory bodies did not hold any of its shares or bonds.

It is hereby declared that the members of the Company's management and supervisory boards were not engaged, during the fiscal year, in any acquisitions, encumbrances or disposals involving the Company's shares or bonds.

It is further stated that the Company's securities held by companies in which the directors and auditors hold corporate positions are as follows:

• the shareholder Salvador Caetano Auto, SGPS, S.A. (of which Eng. Salvador Acácio Martins Caetano is the Chairman of the Board of Directors, Mrs. Maria Angelina Martins Caetano Ramos is the Vice-Chairwoman of the Board of Directors, and Eng. Miguel Pedro Caetano Ramos is a Member of the Board of Directors, acquired: on 12 July 2018, 950 shares at the price of 2.80 € each; on 18 July 2018, 923 shares at the price of 2.80 € each; on 19 July 2018, 3,232 shares at the price of 2.76 € each; on 25 July 2018, 435 shares at the price of 2.76 € each; on 15 November 2018, 1,759 shares at the price of 2.70 € each; on 19 November 2018, 9,897 shares at the price of 2.70 € each; on 20 November 2018, 10,702 shares at the price of 2.70 € each; on 21 November 2018, 675 shares at the price of 2.66 € each; on 05 December 2018, 13,048 shares at the price of 2,76 € each; on 06 December 2018, 15,150 shares at the price of 2.76 € each; on 11 December 2018, 257 shares at the price of 2.60 € each; on 18 December 2018, 138,832 shares at the price of 3.694 € each and 24,000 shares at the price of 2.70 € each; and thus, on 31 December 2018 held 23,097,852 shares with a nominal value of 1 euro each.

• the shareholder FUNDACAO SALVADOR CAETANO (of which Eng. José Reis da Silva Ramos is the Chairman of the Board of Directors, Mrs. Maria Angelina Martins Caetano Ramos is the spouse of the Chairman of the Board of Directors, and Eng. Salvador Acacio Martins Caetano and Mr. Rui Manuel Machado de Noronha Mendes are Members of the Board of Directors), sold on 18 December 2018, 138,832 shares at the price of 3.694 € each and thus, on 31 December 2018, has no shares or bonds.

• the shareholder COVIM - Sociedade Agrícola, Silvícola e Imobiliária, S.A (of which Mrs. Maria Angelina Martins Caetano Ramos is the Chairwoman of the Board of Directors, and Eng. José Reis da Silva Ramos is the spouse of the Chairwoman of the Board of Directors) carried out no transactions and thus, on 31 December 2018, held 393,252 shares with a nominal value of 1 euro each.

• the shareholder COCIGA - Construções Civis de Gaia, S.A. (of which Mrs. Maria Angelina Martins Caetano Ramos is the Chairwoman of the Board of Directors, Eng, José Reis da Silva Ramos is the spouse of the Chairwoman of the Board of Directors, and Eng. Salvador Acácio Martins Caetano is a Member of the Board of Directors) carried out no transactions and thus, on 31 December 2018, held 290 shares with a nominal value of 1 euro each.

For the purpose provided in the final section of article 447(1) of the Commercial Companies Code (companies in a control or group relationship with the company), it is stated that:

· Eng. José Reis da Silva Ramos, Chairman of the Board of Directors, holds:

• 39.49%1 of the share capital of Grupo Salvador Caetano, SGPS, S.A., a company in a control relationship with this Company;

1 This percentage includes shares held by the spouse

· Dr. Maria Angelina Martins Caetano Ramos, Member of the Board of Directors, holds: - 39.49%' of the share capital of Group Salvador Caetano, SGPS, S.A., a company in a control relationship with this Company;

1 This percentage includes shares held by the spouse

· Eng. Salvador Acácio Martins Caetano, Member of the Board of Directors, holds: - 39.49%' of the share capital of Group Salvador Caetano, SGPS, S.A., a company in a control relationship with the Company;

1 This percentage includes shares held by the spouse

.

· Eng. Miguel Pedro Caetano Ramos, Member of the Board of Directions, holds:

• 0.00223% of the share capital of Grupo Salvador Caetano, SGPS, S.A., a company in a control relationship with the Company.

Qualified shareholdings

(Under the terms of Regulation 5/2008, issued by the CMVM)

On 31 December 2018, the shareholders with qualified shareholdings in the company's share capital are the following:

SHAREHOLDER	Shares	% of voting rights
Salvador Caetano - Auto - SGPS, S.A.	23.097.852	65.99
Toyota Motor Europe NV/SA	9,450,000	27.000

Individual Accounts

December 2018

FINANCIAL HIGHLIGHTS

		(Euros)
	Dec'18	Dec '17
SALES	363.662.703	313.210.999
CASHFLOW	22.936.004	17.928.987
NET INCOME	12.786.759	9.338.305
NET FINANCIAL EXPENSES	2.060.032	2.003.235
PAYROLL EXPENSES	16.240.571	15.614.797
NET INVESTMENT	5.009.739	8.366.063
GROSS WORKING CAPITAL	89.552.756	73.438.926
GVA	30.991.581	23.482.573
UNITS SOLD	18.820	16.895
NUMBER OF EMPLOYEES	514	507

ASSETS	Notes	31/12/2018	31/12/2017
NON-CURRENT ASSETS
Intangible assets	8	7 215	89.528
Tangible fixed assets	5	28.993.197	30.212.204
Investment properties	6	12.507.561	14.555.076
Goodwill	7	611.997	611.997
Financial investments - equity method	9	44.596.492	40.836.444
Other financial investments	10	59.504	59.504
Deferred tax assets	15	1.320.835	1.320.835
Total non-current assets		88.096.801	87.685.588
CURRENT ASSETS
nventories	11	61.082.260	61.045.015
Accounts receivable	12	110.786.784	106.694.935
Other accounts receivable	13	3.629.670	2.454.538
Other current assets	14	2.835.539	2.449.484
Other financial investments	10	3.432.799	3.432.799
Cash and cash equivalents	4	15.003.395	14.225.420
Total current assets		196.770.447	190.302.191
		284.867.248	277.987.779

STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2018

EQUITY AND LIABILITIES		Notes	31/12/2018	31/12/2017
EQUITY
Share capital			35.000.000	35.000.000
Legal reserve			7.498.903	7.498.903
Adjustments to financial investments Revaluation reserve			5.810.898	3.579.095
Other reserves			6.195.184 67.319.346	6.195.184 67.319.346
			1.788.817	1.781.402
Retained earnings Net income				9.338.305
			12.786.759
	Total equity	16	136.399.907	130.712.235
LIABILITIES
NON-CURRENT LIABILITIES
Loans		17	35.552.624	24.951.241
Defined benefit plan liabilities		21	5.560.983	5,655,000
Deferred tax liabilities	Total non-current liabilities	15	154.852	158.398
			41.268.459	30.764.639
CURRENT LIABILITIES
Loans		17	35.330.069	51.559.955
Accounts payable		18	35.020.440	33.491.227
Other accounts payable		19	12.712.158	10.373.165
Corporate income		15	1.945.972	1.648.715
Other current liabilities		20	21.751.226	19.437.842
Defined benefit plan liabilities		21	439.017
	Total current liabilities		107.198.882	116.510.905
	Total liabilities		148,467,341	147.275.544
	Total equity + liabilities		284.867.248	277.987.779

chartered accountant

ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS

JOSÉ REIS DA SILVA RAMOS - President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO matthew peter harrison RUI MANUEL MACHADO DE NORONHA MENDES

INCOME STATEMENT BY NATURE FOR THE YEARS ENDED 31 DECEMBER 2018 AND 2017

	Notes	31/12/2018	31/12/2017
Operational gains
Sales and service rendered	24 & 25	363.662.703	313.210.999
Other gains	28	41.014.930	37.369.167
Variation in production	11	-3.364.205	3.170.060
Total operational gains		401.313.428	353.750.226
Operational expenses
Cost of goods sold and raw material consumed	11	-302-261-681	-264.702.751
External supplies and services	26	-45.929.839	-44.740.211
Payroll expenses	27	-16.240.571	-15.614.797
Depreciations	5, 6 & 8	-8.358.574	-8.302.452
Provision and impairment	22	5.778	-22.903
Other expenses	28	-12.327.753	-9.042.893
Total operational expenses		-385.112.640	-342.426.007
Operational income		16.200.787	11.324.219
Gains in financial investments - equity method	ி	2.295.780	2.330.890
Interest expenses	29	-2.243.373	-2.313.065
Interest income	29	183.341	309.830
Income before taxes		16.436.536	11.651.874
Income tax for the year	15	-3.649.777	-2.313.569
Net income		12.786.759	9.338.305

CHARTERED ACCOUNTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA BOARD OF DIRECTORS

JOSÉ REIS DA SILVA RAMOS - President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI MANUEL MACHADO DE NORONHA MENDES Statement of the comprehensive income at 31 December 2018 and 2017

	31/12/2018	31/12/2017
Net profit for the period Components of other consolidated comprehensive income, that could not be recycled by profit and loss Remeasurement (actuarial losses gross of tax) (Note 21) Deferred tax of actuarial losses (Note 15) Other changes in equity	12.786.759	9.338.305
Comprehensive income	12.786.759	9.338.305
CHARTERED ACCOUNTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA	BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS - President
	MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACACIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS
	KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON

RUI MANUEL MACHADO DE NORONHA MENDES

STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE PERIODS ENDED 31 DECEMBER 2018 AND 2017

				Adjustments
	Share	Legal	Revaluation	to	Other	Total	Retained	Net	Total
	capital	reserve	reserve	nvestments financial	reserve	reserves	earnings	income	equity
Balance Sheet at 1 January 2017	35.000.000	7.498.903	6.195.184	2.705.421	67.319.346	83.718.855	1 707 102	5.950.756	126.376.712
Changes in period MEP						0
Allocation of profits				626.455		9 626.45	74.301	-700.756	o o o
Remeasurement (actuarial losses)						0
Other changes in equity				247.218		247.218			247.218
	0	0	0	873.674	0	873.674	74 30	-700.756	247.218
Net income								9.338.305	9.338.305
Total gains and losses								9.338.305	9.338.305
Transactions with shareholders in the period									0
Others transactions Dividends								-5.250.000	-5.250.000 0
	0	0	0	0	0	0	0	-5.250.000	-5.250.000
Balance sheet at 31 December 2017	35.000.000	.498.903 L	195.184 9	579.095 ల	67.319.346	528 84.592.	402 1 781	9.338.305	130.712.235
Balance Sheet at 1 January 2018	35.000.000	7.498.903	6.195.184	3.579.095	67.319.346	84.592.528	1.781.402	9.338.305	130.712.235
Changes in period MEP									0
Allocation of profits				2.330.890		2.330.890	7.415	-2.338.305	0 0 0
Remeasurement (actuarial losses)
Other changes in equity				-99.087		-99.087			0
	0	0	0	231,803 ਟ	0	2.231.803	7 415	-2.338.305	247.218
Net income								12.786.759	12.786.759
Total gains and losses								12.786.759	12.786.759
Transactions with shareholders in the period									0
Dividends								-7.000.000	-7.000.000
Others transactions									0
	0	0	0	0	0	0	0	-7.000.000	-7.000.000
Balance sheet at 31 December 2018	35.000.000	7.498.903	6.195.184	5.810.898	67.319.346	86.824.331	1.788.817	12.786.759	136,399,907

ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA CHARTERED ACCOUNTANT

RUI MANUEL MACHADO DE NORONHA MENDES MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO JOSÉ REIS DA SILVA RAMOS - President MIGUEL PEDRO CAETANO RAMOS MATTHEW PETER HARRISON KATSUTOSHI NISHIMOTO

BOARD OF DIRECTORS

	Notes	(Euros) 2018 2017
STATEMENT OF CASH FLOWS ON OPERATING ACTIVITIES
Collections from customers Payments to suppliers Payments to personnel		476.589.092 -419.707.084 -8.446.124	397.868.482 -364.976.999 -8.144.486
Operating flow		48.435.884		24.746.997
Payments of income tax Other collections/Payments related to operating activities			-4.837.374 -23.662.739	-1.646.620 -27 837 307
Cash flow from operating activities			19.935.770	-4.736.931

STATEMENT OF CASH FLOWS ON INVESTING ACTIVITIES
Collections from:
Investments
Tangible fixed assets	5	99.702	4.813.440
Investment properties	6	1.695.000
Investment subsidy
Interest and others
Dividends			1.794.702	4.813.440
Payments to:
Investments	9
Tangible fixed assets	5	-2.252.938	-361.408
Intangible assets	8		-2.252.938	-361 408
Cash flow from investing activities			-458.236	4.452.032

FINANCING ACTIVITIES

STATEMENT OF CASH FLOWS ON FINANCING ACTIVITIES
Collections from:
Lease	17	0		7.022.706
Loans	17	306.483.075	306,483,075	49,500,000	56.522.706
Payments to:
Loans	17	-310.983.075		-39.041.062
Lease down payments	17	-5.478.163		-4.307.574
nterest and others		-1.726.321		-2.042.650
Dividends	16	-6.995.076	-325.182.634	-5.276.080	-50.667.367
Cash flow from financing activities			-18.699 559		5.855.339

Cash and cash equivalents at beginning of period		ব	14.225.420	8.654.980
	Cash and cash equivalents at end of period	র্ব	15.003.395 14.225.420
	Net flow in cash equivalents		777.975	5.570.440
CHARTERED ACCOUNTANT			BOARD OF DIRECTORS
ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA			JOSÉ REIS DA SILVA RAMOS - President
			MARIA ANGELINA MARTINS CAETANO RAMOS
			SALVADOR ACÁCIO MARTINS CAETANO
			MIGUEL PEDRO CAETANO RAMOS
			KATSUTOSHI NISHIMOTO

matthew peter harrison

rui manuel machado de noronha mendes

(Amounts in Euros)

1. INTRODUCTION

Toyota Caetano Portugal, S.A. ("Toyota Caetano" or "the Company") was incorporated in 1946, with its headquarters in Vila Nova de Gaia, which mainly carries economic activities included in the automotive sector, namely the import, assembly and commercialization of light and heavy vehicles, import and sale of industrial equipment, as well as the corresponding technical assistance, the creation and operation of human resources training and development projects, as well as the management of their own properties, including their leasing, and the rental of short or long-term vehicles, with or without a driver.

Its shares are listed in the Lisbon Stock Exchange Market since October 1987.

Toyota Caetano is the distributor of the brands Toyota and Lexus in Portugal and is the head of a group of companies ("Toyota Caetano Group").

As of 31 December, 2018, the companies of Toyota Caetano Group, their headquarters and abbreviations used, are as follows:

Companies

Headquarters

With headquarters in Portugal:
Toyota Caetano Portugal, S.A. ("Parent company")	Vila Nova de Gaia
Saltano - Investimentos e Gestão, S.G.P.S., S.A. ("Saltano")	Vila Nova de Gaia
Caetano Renting, S.A. ("Caetano Renting")	Vila Nova de Gaia
Caetano - Auto, S.A. ("Caetano Auto")	Vila Nova de Gaia
With headquarters in foreign countries:

Praia (Cape Verde)

MAIN ACCOUNTING POLICIES 2.

Caetano Auto CV, S.A. ("Caetano Auto CV")

The main accounting policies adopted in the preparation of the consolidated financial statements are as follows:

BASIS OF PRESENTATION 2.1

These financial statements relate to the financial statements of Toyota Caetano Portugal S.A. and were prepared according to the IFRS - International Financial Reporting Standards, as issued by the International Accounting Standards Board ("IASB"), the International Accounting Standards (IAS), as issued by the International Accounting Standards Committee ("IASC"), and its respective interpretations - IFRIC and SIC, as issued, respectively, by the International Financial Reporting Interpretations Committee ("IFRIC") and by the Standing Interpretation Committee ("SIC"), that have been endorsed by the European Union, in force at the date of preparation of the financial statements.

The financial statements have been prepared on a going concern basis, based on the accounting and having as basis the principle of the historical cost and, in the case of some financial instruments, fair value.

(Amounts in Euros)

First time adoption of the IFRS in the preparation of the financial statements occurred in 2016 so the transition date of the Portuguese Accounting Principles ("Accounting Standardization System" or "SNC") for these regulations was established on January 1, 2015, in accordance with the provisions of IFRS 1 - First-time adoption of international financial reporting standards ("IFRS 1"),

2.2 ADOPTION OF NEW OR REVERSED IAS / IFRS

The following standards, interpretations, amendments and revisions endorsed by the European Union and mandatory in the fiscal years beginning on or after 1 January 2018, were adopted by the first time in the fiscal year ended at 31 December 2018:

1. The impact of the adoption of the new standards, amendments to standards and interpretations that became effective as of 1 January 2018 is as follows:

2. a) IFRS 15 (new), 'Revenue from contracts with customers'. This new standard, applies only to contracts with customers to provide goods or services, and requires an entity to recognise revenue when the contractual obligation to deliver the goods or services is satisfied and by the amount that reflects the consideration the entity is expected to be entitled to, following a five step approach. Modified retrospective application, in which the cumulative effect of the application of the new standards on contracts included in the opening balance of retained earnings of January 1, 2018 was recognized. This standard did not have any impact in the Entity financial statements as evidenced in note 2.2.2.

3. b) Amendments to IFRS 15 'Revenue from contracts with customers'. These amendments refer to additional guidance for determining the performance obligations in a contract, the timing of revenue recognition from a license of intellectual property, the review of the indicators for principal versus agent classification, and to new practical expedients to simplify transition. Retrospective application, in which comparatives were not restated and the cumulative effect of the application of the new standards on the opening balance of retained earnings on January 1, 2018 was recognised. The adoption of this amendment didn't have impact in the Entity financial statements as evidenced in note 2.2.1.
4. c) IFRS 9 (new), 'Financial instruments'. IFRS 9 replaces the guidance in IAS 39, regarding: (i) the classification and measurement of financial assets and liabilities; (ii) the recognition of credit impairment (through the expected credit losses model); and (iii) the hedge accounting requirements for recognition and classification. This standard did not have any impact in the Entity financial statements.
5. d) IFRS 4 (amendment), 'Insurance contracts (Applying IFRS 4 with IFRS 9)'. This amendment allows companies that issue insurance contracts the option to recognise in Other Comprehensive Income, rather than Profit or Loss the volatility that could arise when IFRS 9 is applied before the new insurance contract standard is issued. Additionally, an optional temporary exemption from applying IFRS 9 until 2021 is granted to companies whose activities are predominantly connected with insurance, being applicable at the consolidated level.
6. e) IFRS 2 (amendment), 'Classification and measurement of share-based payment transactions'. This amendment clarifies the measurement basis for cash-settled sharebased payments and the accounting for modifications to a share-based payment plan that change the classification from cash-settled to equity-settled. It also introduces an exception to the principles of IFRS 2 that will require an award to be treated as if it was wholly equitysettled, where an employer is obliged to withhold an amount for the employee's tax

(Amounts in Euros)

obligation associated with a share-based payment and pay that amount to the tax authority. This amendment is not applicable on the Entity financial statements.

• f) IAS 40 (amendment), 'Transfers of Investment property'. This amendment clarifies when assets are transferred to, or from investment properties, evidence of the change in use is required. A change of management intention alone is not enough to support a transfer. This amendment is not applicable on the Entity financial statements.
• g) Annual Improvements 2014 2016.The 2014-2016 annual improvements impacts: IFRS 1, IFRS 12 and IAS 28. There is no impact in the adoption of these improvements in the Entity financial statements.

• h) IFRIC 22 (new), 'Foreign currency transactions and advance consideration'. An Interpretation of IAS 21 'The effects of changes in foreign exchange rates', it refers to the determination of the "date of transaction" when an entity either pays or receives consideration in advance for foreign currency denominated contracts. The date of transaction determines the exchange rate used to translate the foreign currency transactions. Is not applicable on the Entity financial statements. This standard did not have any impact in the Entity financial statements.

• Standards (new and amendments) and interpretations that have been published and are mandatory for the accounting periods beginning on or after 1 January 2019, endorsed by the EU:

• a) IFRS 16 (new), 'Leases' (effective for annual periods beginning on or after 1 January 2019), This new standard replaces IAS 17 with a significant impact on the accounting by lessees who are now required to recognise a lease liability reflecting future lease payments and a "right-of-use asset" for all lease contracts, except for certain short-term leases and for lowvalue assets. The definition of a lease contract also changed, being based on the "right to control the use of an identified asset". As of IFRS 16, the necessary analysis and framing of the actual situations applicable to the date were made, and (i) considering the modified retrospective approach with the Asset equal to the Liability and (ii) considering, as a rule, the mandatory date and (iii) discount rates identical to those practiced in the market for other financing, it is concluded that the impact at the qualitative and quantitative level will not be significant in the future financial statements of the Entity.

• b) IFRS 9 (amendment), 'Prepayment features with negative compensation' (effective for annual periods beginning on or after 1 January 2019). The amendment introduces the possibility to classify certain financial assets with negative compensation features at amortized cost, provided that specific conditions are fulfilled, instead of being classified at fair value through profit or loss. It is not expected significant impact of future adoption of this amendment on the Entity financial statements.
• c) IFRIC 23 (new), 'Uncertainty over income tax treatment' (effective for annual periods beginning on or after 1 January 2019). This interpretation is still subject to endorsement by the European Union. This is an interpretation of IAS 12 - 'Income tax', and refers to the measurement and recognition requirements to be applied when there is uncertainty as to the acceptance of an income tax treatment by the tax authorities. In the event of uncertainty as to the position of the tax authority on a specific transaction, the entity shall make its best estimate and record the income tax assets or liabilities under IAS 12, and not under IAS

(Amounts in Euros)

37 - 'Provisions, contingent liabilities and contingent assets', based on the expected value or the most probable value. The application of IFRIC 23 may be retrospective or retrospective modified. It is not expected significant impact of future adoption of this interpretation on the Entity financial statements.

1. Standards (new and amendments) that have been published and are mandatory for the accounting periods beginning on or after 1 January 2019, but are not yet endorsed by the EU:

2. a) IAS 19 (amendment), Plan amendment, Curtailment or Settlement' (éffective for annual periods beginning on or after 1 January 2019). This amendment is still subject to endorsement by the European Union. This amendment requires an entity to: i) use updated assumptions to determine the current service cost and net interest for the remaining period after amendment, reduction or settlement of the plan; and ii) recognize in the income statement as part of the cost of past services, or as a gain or loss in the settlement, any reduction in the excess of coverage, even if the excess of coverage had not been previously recognized, due to the impact of the asset ceiling. The impact on asset ceiling is recognised in Other Comprehensive Income, not being allowed to recycle it through profit for the year. It is not expected significant impact of future adoption of this amendment on the Entity financial statements.

3. b) IAS 28 (amendment), "Long-term interests in Associates and Joint Ventures' (effective for annual periods beginning on or after 1 January 2019). This amendment is still subject to endorsement by the European Union. The amendment clarifies that long-term investments in associates and joint ventures (components of an entity's investments in associates and joint ventures), that are not being measured through the equity method, are to be measured in accordance with IFRS 9. The long-term investments in associates and joint ventures are subject to the expected credit loss impairment model, prior to being added, for impairment test purposes, to the whole investment in associates and joint ventures, when impairment indicators exist. It is not expected significant impact of future adoption of this amendment on the Entity financial statements.
4. c) IFRS 3 (amendment), 'Definition of a business (effective for annual periods beginning on or after 1 January 2020). This amendment is still subject to endorsement by the European Union. The amendment revises the definition of a business in order to account for business combinations. The new definition requires that an acquisition include an input, as well as a substantial process that jointly generate outputs. Outputs are now defined as goods and services rendered to customers, that generate investment income and other income, and exclude returns as lower costs and other economic benefits for shareholders. Optional 'concentration tests' for the assessment if one transaction is the acquisition of an asset or a business combination, are allowed. It is not expected significant impact of future adoption of this amendment on the Entity financial statements.
5. d) IAS 1 and IAS 8 (amendment), 'Definition of material' (effective for annual periods beginning on or after 1 January 2020). This amendment is still subject to endorsement by the European Union. The amendment revises the concept of material. Includes clarifications as to obscured information, its effect being similar to the omission or distortion of information; and also clarifications as to the term 'primary users of general purpose financial statements', defined as 'existing or potential investors, lenders and other creditors' that rely on general purpose financial statements to obtain a significant part of the information that they need. It is not expected significant impact of future adoption of this amendment on the Entity financial statements.

(Amounts in Euros)

• e) Annual Improvements 2015 2017, (generally effective for annual periods beginning on or after 1 January 2019). These improvements are still subject to endorsement by the European Union. The 2015-2017 annual improvements impact: IAS 23, IAS 12, IFRS 3 and IFRS 11. It is not expected significant impact of future adoption of this improvements on the Entity financial statements.
• f) Conceptual framework, 'Amendments to references in other IFRS' (effective for annual periods beginning on or after 1 January 2020). These amendments are still subject to endorsement by the European Union. As a result of the publication of the new Conceptual Framework, the IASB introduced changes to the text of various standards and interpretations, like: IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, SIC 32, in order to clarify the application of the new definitions of asset / liability and expense / income, in addition to some of the characteristics of financial information. These amendments are retrospective, except if impractical. It is not expected significant impact of future adoption of these amendments on the Entity financial statements.
• g) IFRS 17 (new), 'Insurance contracts' (effective for annual periods beginning on or after 1 January 2021). This standard is still subject to endorsement by the European Union. This new standard replaces IFRS 4 and applies to all entities issuing insurance contracts, reinsurance contracts and investment contracts with discretionary participation characteristics. IFRS 17 is based on the current measurement of technical liabilities at each reporting date. The current measurement can be based on a complete "building block approach" or "premium allocation approach". The recognition of the technical margin is different depending on whether it is positive or negative. IFRS 17 is of retrospective application. Is not applicable on the Entity financial statements.

2.2.1 Adoption of IFRS 9

Impairment of financial assets

The application of IFRS 9 requires the determination of impairment losses based on the expected credit loss model, rather than an assessment made on the basis of the losses incurred in accordance with IAS 39.

The Company deals the financial asset subject to the new credit impairment model set forth in IFRS 9:

· Debt instruments recognised at amortised cost (Accounts receivable, Other accounts receivable, Loans granted to related entities);

The Company has revised its methodology for calculating and recognising impairment losses for this classes of financial assets.

a) Debt instruments at amortised cost

a.1) Accounts receivable, Other accounts receivable and Assets from contracts with customers

With respect to the balances under the " Accounts receivable," " Other accounts receivable " and "Assets from contracts with customers" headings, the Company uses the simplified approach in IFRS 9, whereby expected impairment losses are recognised since the initial recognition of the balances and according to their maturity, considering

(Amounts in Euros)

a matrix of historical default rates for the maturity of the balances, adjusted via prospective estimates.

a.2) Loans granted to related entities

Loans granted to related entities were considered as having low risk, wherefore impairment losses were determined by means of an evaluation of the losses expected for the next 12 months, according to the general expected credit loss model.

In accordance with the transitional provisions of IFRS 9, the Company opted for retrospective application with adjustment to retained earnings, at the date of initial adoption (January 1, 2018), and comparative values were not restated. The adoption of IFRS 9 did not result in any reclassifications or adjustments.

2.2.2 Adoption of IFRS 15 - "Revenue from contracts with customers"

In accordance with the transitional provisions of IFRS 15, the Company chose to proceed with a retrospective application with adjustment to retained earnings, on the date of initial adoption (January 1, 2018); comparative values were not restated.

The Company chose to apply the transitional provisions of IFRS 15 relating to contract modifications only to modifications occurred on or after January 1, 2018.

The adoption of IFRS 15 did not result in any changes to the Company's accounting policies, reclassifications or adjustments.

2.3 MAIN ACCOUNTING POLICIES

The principal accounting policies used in the preparation of the accompanying financial statements are as follows:

a) Tanqible fixed assets

Tangible fixed assets are recorded at deemed cost, which corresponds to its acquisition cost or its revalue acquisition cost in accordance with generally accepted accounting principles in Portugal until that date, net of accumulated depreciation and accumulated impairment losses.

Impairment losses verified on the realization value of tangible fixed assets are recorded in the year in which they are estimated, against the "Provisions and impairment losses" account in the income statement.

Depreciation is computed on straight line basis on an annual basis, accordingly with the following useful lives:

Vooro

	। Cal S
- Buildings and Other Constructions	20 - 50
- Machinery and Equipment	7 - 16
- Transport Equipment	4 - 6
- Administrative Equipment	3 - 14
- Other Tangible Assets	4 - 8

(Amounts in Euros)

Expenses with maintenance and repair costs of tangible fixed assets are recorded as a cost in the year in which they occur. The repairs of significant amount that increase the estimated usage period of the assets are capitalized and depreciated according to the assets remaining useful life.

Tangible fixed assets in progress relate to tangible assets under construction/development, and are recorded at acquisition cost. These assets are transferred to tangible fixed assets and depreciated as from the date in which they are prepared for use and in the necessary conditions to operate according with the management.

Gains or losses resulting from the disposals and write-offs are determined by the difference between the amount received and the carrying amount of the asset and are recognized as income or expense in the income statement.

b) Intangible assets

Intangible assets are recorded at acquisition cost, net of accumulated depreciation and accumulated impairment losses. Intangible assets are only recognized if it is likely that future economic benefits will flow to the Company, are controlled by the Company and if their cost can be reliably measured.

Research costs and expenses with new technical knowledge are recorded as costs in the statement of profit and loss when incurred.

Development costs are capitalized as an intangible asset if the Company has proven technical feasibility and ability to finish the development and to sell/use such assets and it is likely that those assets will generate future economic benefits. Development expenses which do not fulfill these requirements are recorded as an expense in the period in which they are incurred.

Internal expenses related to Software maintenance and development are recorded as costs in the statement of profit and loss, except in situations in which these expenses are directly related to projects from which it is likely that future economic benefits will flow to the Company. In such circumstances, these expenses are capitalized as intangible assets.

Intangible assets are depreciated on a straight-line basis over a period of three to five years.

The depreciation charge for each period of intangible assets shall be recognized in profit or loss in item "Depreciations and amortizations".

c) Investment properties

Investment properties which relate to real estate assets held to obtain income through its lease or for capital gain purposes, and not for use in production, external supplies and services or for administrative purposes, are recorded at its acquisition cost, being the respective fair value disclosed in the Notes to the financial statements (Note 6).

Whenever these assets fair value is lower than the respective acquisition cost, an impairment loss is recorded against the caption "Investment properties amortization" in the statement of profit and loss. As of the moment in which the recorded accumulated impairment losses no longer exist, they are immediately reversed against the caption "Other operating profits" in the statement of profit and loss until the limit of the amount that would have been determined, net of amortizations or depreciations, if no impairment losses would have ever been recognized in previous years.

(Amounts in Euros)

Investment properties disclosed fair value is determined on an annual basis by an independent appraiser (Market, Cost, Profit and Use Method models) or internally.

d) Lease contracts

Lease contracts are classified as (i) financial lease contracts, if all or a substantial part of the risks and benefits related to possession are transferred and as (ii) operational lease contracts if all or a substantial part of the risks and benefits related to possession are not transferred.

Classification as financial lease contracts or as operational lease contracts depends on the substance of the transaction and not on the form of the contract.

Tangible fixed assets acquired under financial lease contracts and the corresponding liabilities are recorded by the financial method. Under this method the cost of the fixed assets is recorded and reflected in the balance sheet in caption of tangible fixed assets and the corresponding liability determined in accordance with the contractual financial plan are recorded like obtained financing and reflected in the balance sheet. Lease down payments are constituted by interest expenses and by the amortization of capital in accordance with the contractual financial plan, with interests recognized as expenses in the statement of profit or loss for the year to which they relate and with the depreciation of the tangible fixed assets according to their estimated useful lives, according to Note 2.3. a), except when the lease term is shorter than the estimated useful lives.

For lease contracts considered as operational, the rents paid are recognized as an expense in the statement of profit or loss over the rental period (Note 25).

e) Inventories

Goods, raw, subsidiary and consumable materials are recognized at the initial moment of their acquisition at cost. Subsequently, these are valued at average acquisition cost, which is lower than market value.

Finished and intermediate goods and work in progress are stated at production cost, which is lower than market value. Production costs include incorporated raw materials, direct labour, production overheads and external services.

Accumulated impairment losses to reduce inventories value reflect the difference between their acquisition cost and net realizable or market value, which corresponds to the price shown on market statistics.

In the case of Inventories, impairment losses are calculated on the basis of market indicators and various indicators of inventory rotation.

f) Government Grants

Government subsidies are recognized at the respective fair value when there is a solid guarantee that they will be received and that the Company will be able to accomplish the conditions required to its concession.

The subsidies related to costs incurred are registered as a gain if there is a reasonable guaranty that they will be received, if the company has already incurred in the subsidiary costs and if they fulfil the conditions for their concession.

(Amounts in Euros)

g) Impairment of assets

• Non-current assets except Goodwill

Assets are assessed for impairment at each statement of financial position date whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Whenever the carrying amount of an asset exceeds its recoverable amount (defined as the highest of the net sale price and the use value, or as the net sale price for assets held for sale), an impairment loss is recognized in the statement of profit and loss under the caption "Provisions and impairment losses". The net selling price is the amount that would be obtained from the sale of an asset in a transaction between independent entities, less the cost of the disposal. The value in use is the present value of estimated future cash flows expected to arise from the continued use of an asset and its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if not possible, for the cash-generating unit to which the asset belongs.

The reversal of impairment losses recognized in previous years is recorded when it is concluded that the impairment losses recognized for the asset no longer exist or have decreased. This analysis is performed whenever there is an indication that the impairment losses previously recognized have been reversal is recorded in the statement of profit or loss in the caption "Other operating income". However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation and amortization) had no impairment losses been recognized for that asset in prior years.

- Goodwill

The value of Goodwill is not amortized, being tested for impairment purposes on an annual basis. The recoverable amount is determined as being the present value of estimated future cash flows that are expected to be generated by the continuous use of the asset. Impairment losses of Goodwill are recognized in the income statement in the caption "Provisions and Impairment Losses".

Goodwill impairment losses cannot be reversed.

h) Financial Expenses

Loan's related financial costs (interests, premiums, ancillary costs and lease interests) are recognized as financial costs in income statement of the period in which they are incurred, in accordance with the accrual principle and the effective interest rate method, except if those costs are directly related to the acquisition, construction of fixed assets. In this case, the referred costs are capitalized, being part of the asset cost. The capitalization of these costs begins after the beginning of the preparation of the construction or asset development activities and it is interrupted when the asset is ready to be used or when the project is suspended. Any financial income generated by loans that are directly related with a specific investment, are deducted to financial expenses elected for capitalization purposes.

(Amounts in Euros)

i)Financial instruments

1- Financial Assets

Accounting policy adopted as of January 1, 2018

Recognition

Purchases and sales of investments in financial assets are recorded on the date of the transaction, i.e., the date on which the Company undertakes to buy or sell the asset.

Classification

The classification of financial assets depends on the business model followed by the Company to manage its financial assets (receipt of cash flows or appropriation of fair value changes) and the contractual terms of the cash flows receivable.

Changes to the classification of financial assets can only be made when the business model is changed, except in the case of financial assets at fair value through other comprehensive income, which are equity instruments and, therefore, can never be reclassified to another category.

Financial assets may be classified according to the following measurement categories:

(i) Financial assets at amortised cost: includes financial assets that correspond only to the payment of nominal value and interest, and the business model followed by management is the receipt of contractual cash flows;

(ii) Financial assets at fair value through other comprehensive income: this category may include financial assets that qualify as debt instruments (contractual obligation to deliver cash flows) or equity instruments (residual interest in an entity);

a. In the case of debt instruments, this category includes financial assets that correspond only to the payment of nominal value and interest, when the business model followed by management is the receipt of contractual cash flows, either occasionally or a result of their sale;

b. In the case of equity instruments, this category includes the percentage of interest held in entities over which the Company does not exercise control or significant influence, and which the Company irrevocably chose, on the date of initial recognition, to designate at fair value through other comprehensive income;

(iii) Financial assets at fair value through profit or loss: includes assets that do not meet the criteria for classification as financial assets at amortised cost or at fair value through other comprehensive income, whether they refer to debt instruments or equity instruments that were not designated at fair value through other comprehensive income.

The classification of the Company's financial assets by category as of December 31, 2018, is shown in Note 29

(Amounts in Euros)

Measurement

The Company initially measures financial assets at fair value, plus transaction costs directly attributable to the acquisition of the financial asset, for financial assets that are not measured at fair value through profit or loss. Transaction costs of fair value through profit or loss are recorded in the income statement when incurred.

Financial assets at amortised cost are subsequently measured in accordance with the effective interest rate method, minus impairment losses. Interest income on these financial assets is included in "Interest earned on assets at amortised cost" in financial income.

Financial assets at fair value through other comprehensive income, which are debt instruments, are subsequently measured at fair value through fair value changes recognised in other comprehensive income, except for variations related to the recognition of impairment, interest income and gains/(losses) due to foreign exchange differences, which are recognised in the income statement for the year. Financial assets at fair value through other comprehensive income are subject to impairment.

Financial assets at fair value through other comprehensive income which are equity instruments are measured at fair value on the date of initial registration and subsequently, and changes in fair value are recorded directly in other comprehensive income, in equity, and no future reclassifications will occur, even after derecognition of the investment. Dividends obtained from these investments are recognised as gains, in the income statement for the year, on the date they are attributed.

Impairment losses

The Company prospectively assesses the expected credit losses associated with the financial assets, which are debt instruments, classified at amortised cost and at fair value through other comprehensive income.

The applied impairment methodology takes into account the credit risk profile of the debtors, and different approaches are used depending on the nature of the debtors.

With respect to the accounts receivable under the " Accounts receivable " and " Other Accounts receivable " headings and Assets from contracts with customers, the Company uses the simplified approach allowed by IFRS 9, according to which expected credit losses are recognised since the initial recognition of the accounts receivable and throughout their maturity, considering a matrix of historical default for the maturity of the accounts receivable, adjusted via prospective estimates.

With respect to accounts receivable from related entities, which are not considered part of the financial investment of these entities, credit impairment is assessed according to the following criteria: i) if the account receivable is immediately payable ("on demand"); ii) if the account receivable has a low risk; or (ii) if it has a maturity of less than 12 months.

In cases where the amount receivable is immediately payable and the related entity is able to pay it, the probability of default is close to 0% and, therefore, the impairment is considered equal to zero. In cases where the account receivable is not immediately payable, the related entity's credit risk is assessed and if it is considered "low" or if the maturity is less than 12 months, then the Company only evaluates the probability of a default occurring for the cash flows that will mature in the next 12 months.

(Amounts in Euros)

To all other situations and types of accounts receivable, the Company uses the general approach of the impairment model, evaluating on each reporting date whether there has been a significant increase in credit risk since the date on which the asset was initially recognised. If there is no increase in credit risk, the Company calculates an impairment corresponding to the amount equivalent to expected losses within a period of 12 months. If there is an increase in credit risk, the Company calculates an impairment corresponding to the amount equivalent to expected losses for all contractual flows until the maturity of the asset.

Derecognition of financial assets

The Company derecognises financial assets when, and only when, contractual rights to cash flows have expired or have been transferred and the Entity has substantially transferred all the risks and benefits pertaining to the ownership of the asset.

Accounting policies adopted untill December 31, 2017

i)Investments

Investments held by the Company are classified as follows: "Investments measured at fair value through profit and loss', 'Loans and receivables', 'Investments held to maturity' and 'Investments available for sale'. The classification depends on the subjacent intention of the investment acquisition.

Assets available for sale

These are all the remaining assets that are not classified as held to maturity or measured at fair value through profit and loss, being classified as non-current assets. This category is included in non-current assets, except if the Board of Directors has the intention of alienate the investment within a period inferior to 12 months starting from the Statement of financial position date. At December 31, 2017 and 2016, Toyota Caetano did not have financial instruments registered in the items "Investments available for sale".

Fair Value of Financial Investments

To determine the fair value of a financial asset or liability, if such a market exists, the market price is applied (Level 1). A market is regarded as active if quoted prices are readily and regularly available from an exchange, broker or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. Otherwise, which is the case of some financial assets and liabilities, valuation techniques that are generally accepted in the market are used based on market assumptions (e.g.; discounted cash flow models that incorporate interest rate curves and market volatility, which is the case of derivative financial instruments) (Level 2). On the other cases, valuation techniques are used, not based on observable market data (Level 3).

Investments are all initially recognized at fair value, including transaction costs, with the exception of investments recognized at fair value through profit or loss. In this case, investments are initially recognized at fair value, and the respective transaction costs are recognized directly in the income statement.

(Amounts in Euros)

"Available for sale investments" and "investments at fair value through profit or loss" are kept at fair value at the balance sheet date, without deducting any transaction cost that could occur until the time of disposal.

Available for sale investments representative of share capital from unquoted companies are recognized at the acquisition, taking into account the existence or not of impairment losses. It is conviction of the Board that the fair value of these investments does not differ significantly from their acquisition cost.

Gains and losses arising from a change in the fair value of investments available for sale are recorded under equity caption "Fair value reserves" until the investment is sold or disposed, or until it is determined to be impaired. At that moment, the accumulated gains or losses previously recognized in equity are transferred to profit and loss statement for the period.

The fair value of the financial investments available for sale is based on the current market prices. If the market is not net (non-listed investments), the Company records the acquisition cost, having in consideration the existence or not of impairment losses.

The Company makes evaluations if it considers that at the statement of financial position date exists clear evidence that the financial asset might be in impairment. In case of stock instruments classified as available for sale, have a significant drop or extended of its fair value inferior to its cost, it indicates that an impairment situation is occurring. If there is any evidence of impairment in "investments available for sale", the accumulated losses - calculated by the difference between the acquisition cost and the fair value deducted from any impairment loss previously recognized in the statement of profit and loss – are retrieved from the equity and recognized in the statement of profit and loss.

All purchases and sales of investments are recorded on their trade date, which is on the date the Company assumes all risks and obligations related to the purchase or sale of the asset.

The investments are derecognized if the right to receive financial flows has expired or was transferred, and consequently, all associated risks and benefits have been transferred.

ii) Cash and cash equivalents

Cash and its equivalents include cash on hand, bank deposits and other treasury applications which reach their maturity within less than three months and are subject to insignificant risks of change in value.

iii) Accounts receivables and Other Accounts receivables

These headings mainly include customer balances resulting from services rendered as part of the Company's activity and other balances related to operating activities. Balances are classified as current assets when they are estimated to be collected within a 12-month period. Balances are classified as non-current when they are estimated to be collected more than 12 months after the reporting date.

Accounting policies adopted as of January 1, 2018

The " Accounts receivables " and " Other Accounts receivables " headings are initially recognised at fair value and are subsequently measured at amortised cost, minus impairments. Impairment losses in Accounts receivables and Other Accounts receivables are recorded in

(Amounts in Euros)

accordance with the principles described in the policy in Note 3.x. The identified impairment losses are recorded in the income statement in losses of impairment and other comprehensive income statement and are subsequently reversed by profit or loss.

Accounting policies adopted until December 31, 2017

Financial assets presented under the "Accounts receivable" and "Other Accounts receivables" headings are measured, when initially recognised, at fair value, and subsequently at amortised cost, in accordance with the effective interest rate method, minus impairment losses. When there is evidence that they are impaired, the corresponding adjustment is recorded in profit or loss. The recognised adjustment is measured by the difference between the amount at which the accounts receivable are recognised and the present value of discounted cash flows at the effective interest rate determined upon initial recognition.

The Accounts receivable and Other Accounts receivables that do not earn interest are measured at cost, less any impairment losses so that they reflect their recoverable value. However, these amounts are not discounted because the effect of their financial update is not considered material.

2-Financial Liabilities

Accounting policy adopted as of January 1, 2018

Financial liabilities are classified in two categories: i) Financial liabilities at fair value through profit or loss; and ii) Financial liabilities at amortised cost.

The "Financial liabilities at amortised cost" category includes liabilities recorded under "Loans obtained" (Note 17), "Accounts payable" (Note 18) and "Other Accounts payable " (Note 19). These liabilities are initially recognised at fair value, net of transaction costs, and subsequently measured at amortised cost according to the effective interest rate method.

Financial liabilities are derecognised when the underlying obligations are extinguished by payment, cancelled, or expire.

As of December 31, 2018, the Company has only recognised liabilities classified as "Financial liabilities at amortised cost."

Financial liabilities are derecognised when the underlying obligations are extinguished by payment, cancelled, or expire.

i) Loans obtained

Loans obtained are initially recognised at fair value, net of any transaction costs incurred. Loans are subsequently measured at amortised cost and the difference between the nominal value and the initial fair value recognised in the income statement and in the other comprehensive income statement throughout the term of the loan using the effective interest rate method.

Loans obtained are classified under current liabilities, unless the Company has an unconditional right to defer the payment of the liability for at least 12 months after the date of the financial report, in which case they are classified as non-current liabilities.

(Amounts in Euros)

ii) Accounts payable

These headings usually include balances of suppliers of goods and services that the Company acquired in the normal course of its business. The items included in these will be classified as current liabilities if the payment is due within 12 months or less; otherwise, the accounts payable will be classified as non-current liabilities.

These financial liabilities are initially recognised at fair their initial recognition, the liabilities shown under the "Accounts payable" heading are measured at amortised cost, using the effective interest rate method.

Accounting policy adopted until December 31, 2017

Financial liabilities are classified in two categories:

i) Financial liabilities at fair value through profit or loss; and ii) Other financial liabilities.

The "Other financial liabilities" category includes liabilities recorded under the "Loans obtained" (Note 17), "Accounts payable" (Note 18) and "Other Accounts payable " (Note 19) headings. These liabilities are initially recognised at fair value and subsequently measured at amortised cost according to the effective interest rate method.

Financial liabilities are derecognised when the underlying obligations are extinguished by payment, cancelled, or expire.

As of December 31, 2017, the Company has only recognised liabilities classified as "Other financial liabilities."

i) Loans

Loans are recorded as liabilities at their nominal value net of up-front expenses which are directly related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the statement of profit and loss on an accrual basis.

ii) Accounts payable and Other Accounts payable

Accounts payable and Other Accounts payable not bearing interests are measured at cost, less impairment losses so that they reflect the respective net realizable value. These amounts are not discounted because its effect in the financial actualization is not considered relevant.

iii) Derivative financial instruments

The Company uses derivative financial instruments to cover risks of financial investments. Derivative financial instruments used by the Company (mainly interest rate swaps and currency forwards), have the specific aim of interest rate risk coverage and exchange rate risk on future transactions in foreign currency.

Derivatives are initially recognized at their cost at the date on which they are contracted, being subsequently measured at fair value. The method used to recognize fair value changes depends on the designation (or not) of derivatives for hedge accounting purposes and on the nature of the hedged item.

(Amounts in Euros)

At December 31, 2016, Toyota Caetano only have derivative financial instruments, for which the company as not applied hedge accounting derivatives. At December 31, 2017 the Company no longer use derivative financial instruments

The derivative financial instruments, for which the company as not applied hedge accounting, although contracted for economic hedging purposes, are initially recorded by the cost, which corresponds to its fair value, if any, and subsequently re-evaluated by its fair value, which variations, calculated through the evaluations made by the banks with which the Company makes the respective contracts, directly affect the items of the consolidated income statement.

The fair value of derivatives acquired as at December 31, 2016 is presented in the Note 23.

j) Post-Retirement Obligations

Toyota Caetano Portugal incorporated by public deed dated December 29, 1988 the Salvador Caetano Pension Fund, with subsequent updates in February 2, 1994, April 30, 1996, August 9, 1996, July 4, 2003, February 2, 2007, December 30, 2008, December 23, 2011 and December 31, 2013.

In order to estimate its liabilities for the payment of the mentioned responsibilities, the company obtains annually an actuarial calculation of the liabilities for past services in accordance with the "Current Unit Credit Method".

Recorded liabilities as of the statement of financial position date relate to the present value of future benefits adjusted for actuarial profits or losses and/or for liabilities for past services not recognized, net of the fair value of net assets within the pension fund (Note 21). The Entity recognized remeasurement in "Other reserves". The contribution to Define Contribution Plan are recognized in expenses for the year.

k) Contingent Assets and Liabilities

Contingent liabilities are defined by the company as (i) possible obligations from past events and which existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under Toyota Caetano's control or (ii) present obligations from past events not recognized because it is not expected that an output of resources that incorporate economic benefits will be necessary to settle the obligation or its amount cannot be reliably measured.

Contingent liabilities are not recorded in the financial statements, being disclosed in the respective Notes, unless the probability of a cash outflow is remote. In these situations no disclosure is made.

Contingent assets are possible assets that arise from past events and whose existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under the company's control.

Contingent assets are not recorded in the financial statements but only disclosed when it is likely the existence of future economic benefits.

I) Income Taxes

In March 2007 the Company took the decision to apply to the Corporate Income Tax for the Group (RETGS) according to the articles 69th and 70th of Income Tax Code (CIRC) and beginning in 1st

(Amounts in Euros)

January 2007. In consequence, the parent company (Toyota Caetano Portugal, S.A.) shall book the income tax calculated in the Group Companies (Toyota Caetano Portugal, Caetano Auto, Saltano and Caetano Renting) in order to determine the group income tax.

The Corporate Income Tax for the year is determined based on the net profit adjusted according to the fiscal regime applicable.

Deferred income taxes are computed using the statement of financial position liability method and reflect the timing differences between the amount of assets and liabilities for accounting purposes and the corresponding amounts for tax purposes. The deferred tax assets and liabilities are computed on an annual basis using the tax rates that are expected to be in force at the time these temporary differences are reversed.

Deferred tax assets are only recorded when there is reasonable expectation that sufficient taxable profits will arise in the future to allow their use or when there are temporary taxed differences that overcome temporary deductible differences at the time of its reversal. At the end of each year the Company reviews its recorded and unrecorded deferred tax assets which are reduced whenever their realization ceases to be likely, or recorded if it is likely that taxable profits will be generated in the future to enable them to be recovered.

Deferred tax assets and liabilities are recorded in the income statement, except if they relate to items directly recorded in equity, situations in which the corresponding deferred tax is also recorded in equity captions.

m) Accrual basis

Revenues and expenses are recorded according to the accrual basis, by which they are recognized in the period to which they relate independently of when the amounts are received or paid. Differences between the amounts received and corresponding income and expenses are recorded in the captions "accruals and deferrals" included in "Other current assets" and "Other current liabilities".

Income and expenses for which the actual amount is yet unknown are recorded based on the best estimate of the Board of Directors of the Company.

n) Revenue - contracts with customers

Accounting policy adopted as of January 1, 2018

Revenue corresponds to the fair value of the amount receivable from transactions with customers in the normal course of business. Revenue is recorded net of any taxes, trade discounts, and financial rebates.

In determining the value of revenue, the Company evaluates the performance obligations undertaken towards customers in each transaction, the price of the transaction to be affected by each performance obligation that is identified, and the existence of variable price conditions that may lead to future adjustments to the value of the recorded revenue, for which the Company makes its best estimate.

Revenue is recorded in the income statement when the control over the product or service is transferred to the customer, i.e., at the moment when the customer becomes able to manage the use of the product or service and to obtain all the remaining economic benefits associated with it.

(Amounts in Euros)

The Company considers that, given the nature of the product or service that is associated with the performance obligations undertaken, the transfer of control occurs mostly on a specific date, but there may be transactions in which the transfer of control occurs continuously over the contractual period that has been previously established.

Accounting policy adopted until December 31, 2017

Revenue is recognized net of taxes and commercial discounts, by the fair value of the amount received or to be received, knowing that:

-The revenue from sales is recognized in the income statement when the significant part of risks and benefits related with the possession of assets is transferred to the acquirer, it is probable the future economic benefits will flow to the entity and these benefits can be measured reliably. -The revenue from services rendered is recognized according to the stage of completion of the transaction at the balance sheet date.

o) Statement of financial position classification

All assets and liabilities, including assed and liabilities deferred tax, accomplishable or receivable in more than one year after the statement of financial position date are classified as "Non-current assets or liabilities".

p) Earnings per share

Basic:

The basic earnings per share is calculated by dividing the taxable income of the shareholders by the weighted average number of common shares issued during the period, excluding the common shares acquired by the company and held as treasury shares.

Diluted:

Diluted earnings per share are calculated by dividing the profit attributable to shareholders, adjusted for the dividends of convertible preferred shares, convertible debt interest and gains and expenses resulting from the conversion, by the weighted average number of common shares issued during the period plus the average number of shares issued in converting potential dilutive common shares.

q) Segment information

In each year the Group identifies the most adequate business and geographic segments.

Information related to the identified operating segments is included in Note 24.

In that note we can find information by subsegments. For the subsegment of vehicles is presented by commercial and industry. For the subsegment of industrial equipment is present by commercial, services and rental

r) Balances and transactions expressed in foreign currencies

Assets and liabilities expressed in foreign currencies are converted to Euros at the prevailing exchange rates published by "Banco de Portugal". Favourable and unfavourable exchange differences, arising from changes between the exchange rates prevailing on the dates of the transactions and those in effect on the dates of payment, collection or as of the period, are recorded in the Income Statement.

(Amounts in Euros)

s) Subsequent events

Events occurring after the statement of financial position date which provide additional information about conditions prevailing at the statement of financial position ('adjusting events') are reflected in the financial statements. Events occurring after the statement of financial position date that provide information on post-statement of financial positions ('non-adjusting events'), when material, are disclosed in the Notes to the financial statements.

2.4 JUDGMENTS AND ESTIMATES

During the preparation of the consolidated financial statements, the Board of the Company based itself in the best knowledge and in the experience of past and/or present events considering some assumptions relating to future events.

Most significant accounting estimates included in attached financial statements as of December 31, 2018 and 2017 include:

a)Useful lives of tangible and intangible assets;

b)Registration of adjustments to the assets values (accounts receivable and inventories) and provisions;

c)Impairment tests performed to goodwill and sensibility tests (Note 7);

d)Discharge of the fair value of derivative financial instruments; and

e)Clearance of responsibilities with Pension complements (Note 21).

The underlying estimations and assumptions were determined based in the best knowledge existing at the date of approval of the financial statements of the events and transactions being carry out as well as in the experience of past and/or present events. Nevertheless, some situations may occur in subsequent periods which, not being predicted at the date of approval of the financial statements, were not consider in these estimations. The changes in the estimations that occur after the date of the financial statements shall be corrected in a foresight way. Due to this fact and to the uncertainty degree associated, the real results of the transactions may differ from the corresponding estimations. Changes to these estimates, which occur after publication of these consolidated financial statements, will be corrected in a prospective way, in accordance with IAS 8. The assumptions with the greatest impact on the estimates mentioned above are the discount rate used for the purposes of calculating the pension liabilities and the Goodwill impairment, and the mortality table used for the purposes of calculating the pension liabilities

The main significant judgments and estimations and assumptions relating to future events included in the preparation of the financial statements are described in the related notes to the financial statements.

2.5 FINANCIAL RISK MANAGEMENT POLICIES

The Company's activity is exposed to a variety of financial risks, such as market risk (including currency risk, interest rate risk), credit risk and liquidity risk. These risks arise from the unpredictability of financial markets that affect the capacity of projected cash flows and profits subject to a perspective of long term ongoing. Management seeks to minimize potential adverse effects that derive from that uncertainty in its financial performance.

The financial risks management is controlled by Toyota Caetano financial department, according to the policies established by the Group Board of Directors. The Board of Directors has

(Amounts in Euros)

established the main principles of global risk management as well as specific policies for some areas, as interest rate risk and credit risk.

i)Exchange rate risk

As a Group with commercial interests geographically diversified the exchange rate risk is mainly the result of transactions arising from the purchase and sale of products and services in a currency that is different from the functional currency of each company.

The exchange rate risk management policy seeks to minimize the volatility of the investments and operations denominated in foreign currencies, contributing to reduce the sensitivity of the Group's results to exchange rate fluctuations. The Group's exchange rate management policy is focused on a case-by-case assessment of the opportunity to hedge this risk, taking into account, particularly, the specific circumstances of the currencies and countries in question.

ii)Interest rate risk

As a result of the relevant proportion of debt at variable rate in its Consolidated Balance Sheet, and of the subsequent interest payment cash flows, Toyota Caetano is exposed to interest rate risk

iii)Liquidity risk

The goal of Toyota Caetano's liquidity risk management is to ensure that the company has the ability to obtain, in a timely manner, the necessary funding to be able to undertake its business activities, implement its strategy and meet its payment obligations when due, while avoiding the need to obtain funding under unfavourable terms.

For this purpose, the Company's liquidity management involves the following aspects:

a) A consistent financial planning based on operating cash flow forecasts for different time horizons (weekly, monthly, annual and multi-annual);

b) The diversification of funding sources;

c) The diversification of the maturities of the debt issued in order to avoid excessive concentrations of debt repayments in short periods of time;

d) The arrangement of committed (and uncommitted) credit facilities, commercial paper programs, and other types of financial operations with relationship Banks, ensuring the right balance between satisfactory liquidity levels and adequate commitment fees.

iv)Credit risk

The Company's credit risk results mainly from: i) the risk of recovery of monetary assets entrusted to third parties, and ii) the risk of recovery of loans granted to entities outside the Company. Credit risk is assessed at the initial moment and over time in order to monitor its evolution.

A significant portion of the amounts receivable from customers is dispersed among a large number of entities, a factor that contributes toward reducing the credit concentration risk. As a general rule, the Company's customers are not assigned a credit rating.

Credit risk is monitored by the Company's financial department, under the supervision of the Board of Directors, based on: i) the rating assigned by the credit insurance company, with which the Company has negotiated a credit insurance agreement; (ii) the debtors' corporate nature; iii) the type of transactions originating the accounts receivable; iv) the experience of past transactions; and (v) the credit limits established for each customer.

The Company considers the probability of default upon the initial recognition of the asset and, according to the occurrence of significant increases in credit risk continuously in each reporting

(Amounts in Euros)

period. In order to assess whether there has been a significant increase in credit risk, the Company compares the risk of default occurring by reference to the reporting date, with the risk of default assessed by reference to the date of initial recognition. Adequate and duly supported prospective information is considered. The following indicators are taken into account:

• · Internal credit risk;
• · External credit risk (where available);
• · Current or expected adverse changes in the debtor's operating results;
• · Significant increases in the credit risk of the debtor's other financial instruments;

· Significant changes in the value of collateral for liabilities, or in the quality of third-party quarantees;

· Significant changes in the debtor's expected performance and behaviour, including changes in the debtor's payment conditions at the level of the Company to which it belongs, as well as changes at the level of its operating results;

Macroeconomic information (such as market interest rates or growth rates) is incorporated into the domestic credit model.

Irrespective of the above analysis, a significant increase in credit risk is presumed to exist if a debtor is in default by more than 30 days from the contractual payment date.

Default is deemed to exist when the counterparty fails to make contractual payments within 90 days of the invoice due date. When financial assets are derecognised, the Company continues to take the necessary measures to recover the amounts owed. In cases of successful recovery, the recovered amounts are recognised in the income statement for the year.

Financial assets are derecognised when there is no real expectation of recovery. The Company classifies a loan or account receivable to be derecognised when the debtor fails to make contractual payments within 90 days.

Impairment of financial assets

a) Accounts receivable and Other Accounts receivable

The Company uses the simplified approach to calculate and record the expected credit losses required by IFRS 9, which allows using estimated impairment losses for all " Accounts receivable " and " Other Accounts receivable " balances. In order to measure expected credit losses, "

Accounts receivable " and " Other Accounts receivable " were aggregated based on the shared credit risk characteristics, as well as on the days of delay. Impairment losses on December 31, 2018 are determined as follows; the expected credit losses include information from prospective estimates. Seniority of customer balances in Note 12.

Until December 31, 2017, the impairment in " Accounts receivable " and "Other Other Accounts receivable " balances were evaluated according to the incurred credit loss method. b) Loans granted to related entities

The balances in "Loans granted to related parties" are considered to have a low credit risk and, therefore, impairment in credit losses recognised during the period are limited to expected credit losses estimated for 12 months. These financial assets are considered to have a "low credit risk" when they have a low uncollectibility risk and the debtor has a high capacity to meet its contractual cash flow liabilities in the short term.

The main goal of Toyota Caetano's credit risk management is to ensure the effective collection of the operating receivables from its Customers, according to the negotiated payment terms. In order to mitigate the credit risk that results from the potential customer-related defaults on payments, the Group's companies that are exposed to this risk have:

· A specific Credit Risk analysis and monitoring department;

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018 (Amounts in Euros)

· Proactive credit management procedures that are implemented and always supported by information systems;

· Hedging mechanisms (credit insurance, letters of credit, etc.).

The credit quality of bank deposits on December 31, 2018 can be summarize as follow:

Bank Deposits Rating	Rating Agencies	Bank Deposits
A1	Moody's	10 320
A2	Moody's	42.476
A3	Moody's	587.458
Ааз	Moody's	8.684
B3	Moody's	296.927
Ba1	Moody's	1.887.865
Ba3	Moody's	6.384.671
Baa1	Moody's	367 437
Baa2	Moody's	4.296.431
Caa1	Moody's	619,558
	Others without rating	414.728
Total		14.916.555

The ratings presented correspond to ratings assigned by the rating agency Moody's.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISSTATEMENTS

During the year ended as of December 31, 2018, there were no changes in accounting policies and no material mistakes related with previous periods were identified.

4. CASH AND CASH EQUIVALENTS

As of 31 December 2018 and 31 December 2017 cash and cash equivalents detail was the following:

	DEC'18	DEC'17
Money Bank Deposits at Immediate disposal	86.840 14.916.555	85.767 14.139.653
Total	15.003.395	14.225.420

5. TANGIBLE FIXED ASSETS

During 2018 and 2017 the movement in tangible fixed assets as well as in the accumulated depreciation were as follows:

(Amounts in Euros)

DEC18	Land	Buildings and other constructions	Machinery and equipment	Vehicles	Administrative equipment	Other fixed assets	Construction in progress	Tota
Gross:
Initial balance	3,946,027	32 576 731	52 682 383	49 067 308	6,208,216	2,969,294	32 456	147 482 415
ncreases	1,481,200	285 685	494 624	6,208,332	32,680	23,044	75.004	8 600 569
Disposals	(5 344)		(34 163)	(5,370 156)	(84			(5.409.746)
Final balance	5,421,882	32 862 416	53.142.845	49,905,484	6.240.812	2.992.338	107 460	150.673.238
Depreciations:
nitial balance	1	29,983,693	50.290.028	27 995 974	6.111.277	2,889,240	1	117.270.211
ncreases		404 328	710 314	6 724 588	54 341	24 525		7.918.095
Transfers, disposals and write offs			(14.808)	(3.493.374)	(84)			(3.508.266)
Final balance	1	30 388 020	50 985 534	31, 227, 188	6.165 534	2,913,765	l	121 680 041
Net Value	5 421 882	2 474 396	2 157 311	18 678 297	75 279	78 573	107 460	28 993 197

		Buildings and				Other
DEC'17		other	Machinery and		Administrative	fixed	Construction in
	Land	constructions	equipment	Vehicles	equipment	assets	progress	Tota
Gross:
nitial balance	3.946.027	32,532,697	52 466 703	46,580,487	6.131.880	2 942 475	9.400	144,609,667
ncreases		44 036	220 363	10 313 500	76 336	26 819	23,056	10.704 110
Disposals			(4.684)	(7.826.678)				(7.831.363)
Transfers and write offs								1
Final balance	3.946.027	32,576,733	52,682,382	49.067.308	6.208.216	2,969, 294	32 456	147,482,415
Depreciations:
nitial balance	1	29 587 661	49 519 987	27 540 038	6,055,999	2 864 599		115,568,285
ncreases		396 032	774.725	6.041.565	55.277	24 641		7.292.239
Transfers, disposals and write offs			(4.684)	(5.585.629)				(5.590.313)
Final balance	1	29 983 693	50 290 028	27 995 974	6.111.276	2 889 240	l	117 270 211
Net value	3,946 027	2,593,040	2,392,354	21 071 334	96 940	80 054	32 456	30 212 204

As at 31 December 2018 and 2017 the tangible fixed assets used under finance lease are resented as follows:

		DEC'18
	Acquisition value	Depreciations	Current values
Tangible fixed assets Industrial equipment
	36.581.801	(20.107.820)	16.473.981

		DEC'17
	Acquisition value	Depreciations	Current values
Tangible fixed assets Industrial equipment	32.794.866	(14.631.521)	18.163.346

(Amounts in Euros)

6. INVESTMENT PROPERTIES

As at 31 December 2018 and 31 of December of 2017, the caption "Investment properties" correspond to real estate assets detained by Toyota Caetano in order to obtain income through its lease or increase in value. These assets are measured at acquisition cost.

Gains associated to Investment properties are registered in the caption "Other Gains" and they ascended to 3.330.919 Euros in the period ended in 31 December 2017 (3.338.592 Euros in 31 December 2017) (Note 27).

In accordance with external appraisals done in the end of 2012, 2014, 2015, 2016, 2017and 2018 by independent experts and in accordance with evaluation criteria usually accepted for real estate markets (Market Method, Cost Method, Return Method and Use Method), the fair value of those investment properties amounts to 53,9 million Euros, approximately ( 56,8 million Euros in 2017),

The Board of Directors is convinced that there is no significant change in the fair value of those investment properties in 2018 believing that are valid the appraisals done.

The detail of investment properties in 2018 and 2017:
-------------------------------------------------------

			DEC18			DEC'17
Buildings	Place	Carrying amount	Fair value	Appraisa	Carrying amount	Fair value	Appraisal
Industrial facilities Industrial facilities Industrial facilities Industrial warehouse Commercial facilities Land Commercial facilities	V N. Gaja V N. Gaja Carregado V N. Gaia Lisboa Leiria Cascais Cascais Prior Velho Loures Vila Franca Xira	2 802 242 237 553 4 989 846 804 483 100 294 237 818 2 943 103 392 221 12,507 561	8 692 000 788 000 19 218 000 6,077,000 1.300 000 1.000.000 15,715,000 1 648 000 54 438 000	nterna nterna nterna nterna Externa External nterna nterna	3.019 591 249 386 5.038 392 841 109 1 141 201 355 125 108,640 251.205 2,943,103 193 024 414 300 14 555 076	8 692 000 788 000 19,218,000 6,077,000 1 300 000 797 000 834 000 950 000 15 717 000 849 000 1 648 000 56 870 000	ntemal Intemal Internal ntema ntema ntema nterna nterna External ntemal ntema

During 2018 and 2017, the movements occurred in the investment properties as well as in the accumulated depreciation were as follows:

(Amounts in Euros)

		Buildings and
DEC'18		other
	l and	constructions	Total
Gross:
Initial balance	9.713.389	31.798.505	41.511.894
ncreases
Disposals	(829.086)	(1.671.934)	(2.501.020)
Transfers and write-offs
Final balance	8.884.303	30.126.572	39.010.874
Depreciations:
Initial balance		26.956.819	26.956.819
Increases		358.166	358.166
Transfers, disposals and write-offs		(811.670)	(811.670)
Final balance		26.503.315	26.503.315
Net value	8.884.303	3.623.258	12.507.560

DEC'2017		Buildings and other
	Land	constructions	Total
Gross:
Initial balance	9.782.682	32.006.383	41.789.065
Increases
Disposals	(69.293)	(207.878)	(277.170)
Transfers and write-offs
Final balance	9.713.389	31.798.505	41.511.895
Depreciations:
Initial balance	1	26.666.379	26.666.379
ncreases		456.742	456.742
Transfers, disposals and write-offs		(166.302)	(166.302)
Final balance		26.956.819	26.956.819
Net value	9.713.389	4.841.687	14.555.076

. The movements in the period ended at 31 December, 2018 are due to the disposal of the commercial facility located in Lisbon, Loures and Leiria, with matrix Articles U-000791-A, U-007970-A and U-002013-A and U-002015-A respectively.

The movements in the period ended at 31 December, 2017 are due to the disposal of the commercial facility located in Porto Alto, Benavente, with matrix Article U-005843-A.

7. GOODWILL

During 2018, didn't occur any changes to the Goodwill value.

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The caption "Goodwill" is related with BT Activity (forklifts) resulting from Movicargo s acquisition in 2008, whose activity was transferred to the parent company Toyota Caetano Portugal.

The Goodwill is not amortized, being tested annually for impairment.

For impairment test's purposes, the recoverable amount was determined in accordance with the Value in Use, through the discounted cash flows model and based on business plans carried out by people in charge, being approved by management. The discount rate used is considered to represent the risks inherent to the business.

In 31 December 2018, the main assumptions of the test are as follows:

	Industrial Equipment Division
Goodwill	611.997
Cash Flows Projection Period	5 years
Growth Rate (g) (1)	1,6%
Discount Rate (2)	5,98%

(1) Growth rate used to extrapolate cash flows beyond the period considered in the business plan

(2) Discount rate applied to projected cash flows

The Board, supported by the estimated discounted cash flows, concluded that on December 31, 2017, the net book value of assets, including goodwill (612 thousand of Euros), does not exceed its recoverable amount (38 million of Euros).

The projections of cash flows were based on historical performance and on expectations of improved efficiency. The management believe that a possible change (within a normal scenario) in key assumptions used in calculating the recoverable amount will not result in impairment losses.

8. INTANGIBLE ASSETS

During 2018 and 2017, the movements in intangible assets were as follows:

(Amounts in Euros)

	Total
1.174.902	2.652.119
	-
	-
1.174.902
1.112.810
27 437 54.877	82.313
1.167.687
7.215	7.215
	1.477.217 2.652.119 1.477.217 1.449.781 2.562.591 1.477.217 2.644.904

DEC'17	Besearch & development expenses	Software	Total
Gross:
Initial balance	1.477.217	1.164.919	2.642.136
ncreases		21.645	21.645
Disposals		(11.662)	(11.662)
Transfers and write-offs
Final balance	1 477 217	1.174.902	2.652.119
Depreciations:
Initial balance	957 375	1.055.632	2.013.007
ncreases	492 406	61.065	553-471
Transfers, disposals and write-offs		(3.887)	(3.887)
Final balance	1.449.781	1.112.810	2.562.591
Net value	27 437	62.092	89.528

9. FINANCIAL INVESTMENTS - EQUITY METHOD

In 31 December 2018 and 31 December 2017, the financial investments were as follows:

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018 (Amounts in Euros)

		CAETANO AUTO CAETANO AUTO CV	SALTANO	Equity Method Adjustments	TOTAL
Balance 31 December 2016	15.010.621	3.209.077	18.426.602	549 856	37.196.156
Acquisitions
Disposal
Gains/Losses	1 545 584	289 093	1 704 816	(146 423)	3 393 070
Dividends received
Other capital movements				247 218	247,218
Others (actuarial losses)
Balance 31 December 2017	16 556 205	3.498 170	20.131.418	650,651	40.836.444
Acquisitions
Disposal
Gains/Losses	1.723 335	181.708	2 095 023	(140.932)	3.859 134
Dividends received
Other capital movements				(99 087)	(99 087)
Balance 31 December 2018	18 279 540	3 679 878	22 226 440	410 632	44,596,491

The gains and losses from group companies shown in Income Statement (2.295.780 Euros) include:

Gains in financial investments - Equity method	3.859.134
Intercompany margin deferral (Note 20)	-1.563.354
	2 295 780

The share of capital held in Subsidiaries can be summarized as follows:

		Caetano Auto		Caetano Auto CV	Saltano
	DEC'18	DEC'17		DEC'17	DEC'18	DEC'17
IEquity	39.475.532	35.753.909	4.529.610	4.305.942	22.230.970	20.135.4821
INet income	3.721.623	3.337.762	223.668	355.851	2.095.488	1.705.195
% Direct	46.31%	46.31%	81.24%	81.24%	99.98%	99.98%
% Indirect	98.40%	98.40%	81.24%	81.24%	99.98%	99.98%1

Subsidiaries' financial position and net income can be summarized as follows:

DEC18
	Caetano Auto	Caetano Auto CV	Saltano
Assets
Current	56.490.292	5.692.940	2.016.166
Non-current	90.240.546	1.257.814	23.789.240
Liabilities
Current	99,202,695	2.322.266	3.574.436
Non-current	8.052.611	98.878
Equity	39.475.532	4.529.610	22.230.970
Sales	234.877.024	14.733.922
Operational income	5.127.518	356.168	-26 429
Financial income	31.019	-6.629
Net income	3.721.623	223.668	2.095.488

DEC'17
	Caetano Auto	Caetano Auto CV	Saltano
Assets
Current	79.643.872	6.255.499	2.041.338
Non-current	46.825.112	1.326.27	21.673.269
Liabilities
Current	83.620.907	3.176.9561	3.579.125
Non-current	7.094.168	98.878
Equity	35.753.909	4.305.942	20.135.482
Sales	212.093.511	12.649.730
Operational income	4.519.938	548.386	-5.608
Financial income	-11.567	-43.973
Net income	3.337.762	355.851	1.705.195

(Amounts in Euros)

10. OTHER FINANCIAL ASSETS

During the period ended in December 31, 2018 and 2017 the movements in Other Financial Assets were as follows:

	DEC'18	DEC'17
Other Financial Assets
Balance as per 1st January	3.492.302	3.492.302
Acquisitions during the period
Other regularizations
Balance as per 31st December	3.492.302	3.492.302

Other Financial Assets can be summarized as follows:

Other Financial Assets	DEC'18	DEC'17
Non-current Investments in small private companies	59.504	59.504
Current Loan to group companies (Note 30)	3.432.799	3.432.799
	3.492.302	3.492.302

The caption Investments in small companies regards to small investments already existing at Caetano Components that were transferred in result of the closing of the Company.

Both financial assets are measured at amortized cost less impairment losses.

The Board believes that the carrying amount of investments in small private companies is roughly near its fair value.

11. INVENTORIES

As of 31 December 2018 and 31 December 2017, inventories detail was the following:

	DEC'18	DEC'17
Goods	50.074.376	45.144.905
Raw materials	8.885.206	10.413.228
Finished and Intermediate goods	1.242.750	4.432.510
Work in progress	879.928	1.054.373
	61.082.260	61.045.015

(Amounts in Euros)

The cost of goods sold and consumed as of 31 December 2018 and 31 December 2017 was as follows:

	DEC'18		DEC'17
	Goods	Raw materials	Tota	Goods	Raw materials	Tota
Opening balances	45 144 905	10.413.228	55.558.132	40.511.618	9.307.008	49 818 626
Purchases	268 721.615	36.941.514	305 663 130	236.996.229	33.446.028	270 442 257
Closing balances	50.074.376	8.885.206	58.959 582	45 144 905	10.413.228	55,558,132
Tota	263 792 144	38.469.536	302.261.680	232 362 942	32,339,809	264 702 751

The variation of production as of 31 December 2018 and 31 December 2017 was as follows:

DEC'18 DEC'17 2.122.678 Opening balances 5.486.883 Closing balances 5.486.883 2.316.823 Total (3.364.205) 3.170.060		Finished and Intermediate goods and work in progress

12. ACCOUNTS RECEIVABLE

As of 31 December 2018 and 31 December 2017 Accounts Receivable detail was the following:

	DFC'18	DFC/2017
	Non-current assets	Non-current assets
Accounts receivable, current accounts	110.737.387	106.649.580
Accounts receivable, doubtful accounts	4 937 580	5.458.117
	115.674.968	112.107.697
Lost of impairments (Note 22)	(4.888.184)	(5.412.762)
	110.786.784	106.694.935

(Amounts in Euros)

Accounts receivable aging

DEC'18	- 60 days	60-90 days	90-120 days	+ 120 days	Total
Customers	54.252.255	22.780.083	9.969.127	15.895.974	102.897 438
Personnel	ব			11.102	11.106
Independent dealers	7.426.444	363.223	27.689	11.488	7.828.844
Accounts receivable	61.678.702	23.143.306	9.996.816	15.918.563	110.737.387

DEC'17	- 60 days	60-90 days	90-120 days	+ 120 days	Total
Customers	65.956.762	9.047.351	4.649.109	20.520.712	100.173.934
Personnel	338			36.658	36.995
Independent dealers	6.318.241	77.652		42.758	6.438.651
Accounts receivable	72.275.340	9.125.002	4.649.109	20.600.128	106.649.580

Debt maturity beyond date

DEC'18	- 60 days	60-90 days	90-120 days	+ 120 days	Total
Accounts receivable	12.792.462	1.065.704	456.298	3.646.618	17.961.082
Accounts receivable, related parties	37,444,392	9,883,825	4.302.358	7.642.962	59.273.537
Total	50.236.854	10.949.529	4 758.656	11.289.580	77.234.619

DEC'17	- 60 days	60-90 days	90-120 days	+ 120 days	Total
Accounts receivable	9.807.482	1.026.141	278.462	4.970.584	16.082.670
Accounts receivable, related parties	27.260.362	8.293.227	4.379.884	15.393.735	55.327.207
Tota	37.067.844	9.319.368	4 658 346	20.364.319	71.409.877

Debt maturity considering impairment losses

DEC'18	- 60 days	60-90 days	90-120 days	+ 120 days	Tota
Doubtful accounts	1,196	1.196	1,196	4,933,994	4,937,580
DEC'17	- 60 days	60-90 days	90-120 days	+ 120 days	Tota
Doubtful accounts	10.760	3.587	3.587	5.440.184	5,458,117

13, OTHER ACCOUNTS RECEIVABLE

As of 31 December 2018 and 31 December 2017 Other Accounts Receivable detail was the following:

(Amounts in Euros)

Other accounts payable	Current
	DEC'18	DEC 17
Personnel	20.605
Down payments	18.621	352.181
Shareholders - RETGS (Note 30)	3.590.444	2.102.357
	3.629.670	2.454.538

14. OTHER CURRENT ASSETS

Other Current Assets detail at 31 December 2018 and 2017 is as follows:

	DEC18	DEC'17
Debitors for accrued incomes
Recover of sales campaigns	2.113.250	1.447.500
Recover of expenses	20.240	242.733
Renting	2.574	15.296
Others	67 743	42,924
	2.203.806	1.748.452
Deferrals
Insurance	120 861	370.226
Expenses from commercial paper programs	125.116	100.358
Others	385.755	230 449
	631.733	701.033
	2.835.539	2.449.484

15. INCOME TAXES

Income Tax

The Company is subject to Corporate income (IRC) at the rate of 21% for the taxable income, plus local tax at the rate of 1,5% resulting in a tax rate, aggregated of a maximum of 22,5%.

In accordance with current legislation the Company tax returns are subject to review and correction by the tax authorities during a period of four years, except when there are fiscal losses, fiscal benefits have been given, or is in course inspections or claims, situations here the periods are increased of suspended. Consequently, the tax returns since 2013 are still subject to review. The Board of Directors of Toyota Caetano believes that any corrections resulting from reviews/inspections by the tax authorities to the tax returns open to inspection, will not have a significant effect on the financial statements of this Company.

Under Article 88 of the Corporate Income Tax Code, companies based in Portugal are also subject to autonomous taxation on a set of expenses at the rates provided in the mentioned article. For fiscal years beginning on or after January 1, 2010, taxable income in excess of 1,5 Million Euros and 7,5 Million Euros, have an additional income tax of 3%, exceeding 7,5 Million Euros and up to 35 Million an additional Income tax of 5% and taxable profit calculated in excess of more than 35 Million Euros an additional Income of 7%.

(Amounts in Euros)

In March 2007 the Company took the decision to apply to the Corporate Income Tax for the Group (RETGS) according to the articles 69th and 70th of Income Tax Code (CIRC) and beginning in 185 January 2007. In consequence, the parent company (Toyota Caetano Portugal, S.A.) shall book the income tax calculated in the Group Companies (Toyota Caetano Portugal, Caetano Auto, Saltano and Caetano Renting) in order to determine the group income tax.

As of 31 December 2018 and 31 December 2017 Income tax detail was the following:

	DEC'18	DEC'17
(Corporate income tax for the year (estimate) Corporate income tax for the year (payments in advance) for the year Corporate income tax for the year (RETGS)	-3.653.324 2.038.925 -479.379 -2.093.778	-2.178.5521 599.661 -69.824 -1 648 715

The current tax can be decomposed as follows:

	DEC'18	DEC'17
Income taxes in year Deferred income taxes	3.653.324 -3.547	2.178.552 135.017
	3.649.777	2.313.569

The reconciliation of the earnings before taxes of the years ended at 31 December, 2018 and 2017 can be analyzed as follows:

	DEC'18	DEC'17
ncome before taxes	16.436.536	11.651.874
National tax expenses	22,50%	22,50%
Theoretical tax expenses	3.698.221	2.621.672
Non-fiscal expenses	165.286	149.040
Penalties	1.828	34.431
Reversion of impairment losses taxed		(16.004)
Equity method	(2.295.780)	(2.330.890)
Non-fiscal gains		(28.425)
Accounting capital gains	(1.100.747)	(1.591.234)
50% fiscal capital gains	550.374	829.692
Fiscal gains		16.499
Fiscal benefits	(52.736)	(76.113)
Current tax	2.878.000	1.814.163
Additional income tax	79.515	109.209
Local tax	205-571	129,583
State tax	490.238	214 166
Deferred tax		(88-569)
Effective tax expenses	3.653.324	2.178.552

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018 (Amounts in Euros)

Deferred Income Tax

Amounts and nature of the assets and liabilities for deferred taxes recorded in the financial statements as of 31 December 2018 and 2017 can be analyzed as follows:

	Initial	Reflected in income statement		Reflected in income statement		Final
2018	balance	Decrease	Increase	Decrease	Increase	balance
Deferred tax assets
Provisions	191 440					191 440
Defined benefit plan liabilities	1.129 395					1.129 395
	1.320 835	-			-	1.320 835
Deferred tax liabilities
40% of depreciation as a result of legal	41.483		(3.547)			37 936
effect of the reinvestments of the gains infixed assets sales	116.915					116.915
	158 398	l	(3.547)			154.851
	Initial		Reflected in income statement	Reflected in income statement		Final
2017	balance	Decrease	Increase	Decrease	Increase	balance
Deferred tax assets
Provisions	287.442		(96.002)			191 440
Fiscal losses	88 269		(88.569)
Defined benefit plan liabilities	1 129 395					1 129 395
Valuation of financial instruments	6.396		(6.396)
	1 511 802	l	(190.967)			1.320 835
Deferred tax liabilities
40% of depreciation as a result of legal	48 576		(7.093)			41.483
Effect of the reinvestments of the gains infixed assets sales	165.772		(48.857)			116.915
	214.348		(55.950)			158.398

Under current legislation in Portugal the carry-forward of tax losses for the years still outstanding, is as follows:

i) Tax losses generated in 2014 and 2016: 12 years

ii) Tax losses generated after 2016: 5 years

16. EQUITY

Composition of Share Capital

As of 31 December 2018 and 2017, Toyota Caetano share capital was represented by 35.000.000 nomitiv shares, totally subscribed and realized, with a nominal value of 1 Euro.

The identification of corporate entities with more than 20% of issued capital was as follows:

• Salvador Caetano Auto (S.G.P.S.), S.A 65,99%
• Toyota Motor Europe NV/SA 27,00%

(Amounts in Euros)

Dividends

In 2018 were distributed dividends in amount of 7.000.000 Euros as a result of application of net income of 2017.

The Board of Directors will propose that a dividend shall be paid in the amount of 7.000.000 Euros. This proposal must be approved in the next General Shareholders Meeting.

Legal reserve

The legal reserve is already fully incorporated under the commercial legislation (20% of the share capital), so it is no longer required that a minimum of 5% of annual net profit is destined for its endowment. This reserve is not available for distribution, except in case of dissolution of the Company, but may be used in share capital increases or used to absorb accumulated losses once other reserves have been exhausted.

Adiustments to financial assets

The amount considered in "Adjustments to financial assets" refers to the results not appropriated by the Equity Method not yet distributed and to the transition adjustments of the initial application of the Equity Method.

Revaluation reserves

The revaluation reserves cannot be distributed to the shareholders, except if they are completely depreciated and if the respective assets that were revaluated have been alienated.

The distributable amount in Equity, excluding Net Income is 69.100.748 Euros, includes in Other reserves and in Retained Earnings.

Proposal for the Allocation of the Profits

In accordance with the provisions laid down in article 376 (1-b) of the Código das Sociedades Comercials (Commercial Companies Code), we propose the following allocation for 2018's profits obtained in the financial year, amounting to Euros 12.786.758,79 stated in the individual financial statements of Toyota Caetano Portugal:

a) To non-distributable reserves by profits recognized in investments in subsidiaries resulting from the application of the equity method.

	Eur	2.295.780.83
b) To dividends to be allocated to Share Capital, 0,20 Eur per share, which considering its 35.000.000 shares totals	Eur	7.000.000.00
c) The remainder for the retained earnings account	Eur	3.490.977.96

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018 (Amounts in Euros)

17. LOANS

As of 31 December 2018 and 2017, loans can be detailed as follows

	DEC'18			DEC'17
	Current	Non-current	TOTAL	Current	Non-current	TOTAL
Bank loans	10.000.000		10.000.000	5.000.000		5.000.000
Mutual loans		10.000.000	10.000.000	7.000.000	10.000.000	17.000.0001
Commercial paper	19.400.000		19.400.000	34.400.000		34.400.0001
Leasing	5.930.069	13.052.624	18.982.6931	5.159.955	14.951.241	20.111.196
Bond loan		12,500,000	12,500,000
	35.330.069	35.552.624	70.882.693	51.559.955	24.951.241	76.511.196

During 2018 the following movements occurred in of bank loans, overdrafts, other loans, Commercial Paper Programs and bond loan:

	Opening				Final balances
	balances	Increases	Disposals	Other movements	BALANCES
Bank loans	5.000.000	37.000.000	32.000.000		10.000.000
Mutual loans	17.000.000		7.000.000		10.000.000
Confirming		19.883.075	19.883.075		l
Commercial paper	34 400 000	237.100.000	252.100.000		19.400.000
Leasing	20.111.196		5.478.163	4.349.660	18.982.693
Bond loan		12.500.000			12.500.000
					1
	76511195.64	306483075	316461238	4349660.47	70882693.17

* With no impact in Statement of cash flows

As of December 31, 2018 and 2017, the detail of bank loans, overdrafts, other loans, Commercial Paper Programs and bond loan is as follows:

DEC'18	Used amount	Limit
Current Bank loan Overdrafts Confirming Commercial paper Leasing	10.000.000 19.400.000 5.930.069 35.330.069	12.000.000 4.000.000 10,000.000 41.000.000 5.930.069 72.930.069
Non-current Mutual loans Leasing Bond loan	10.000.000 13.052.624 12.500.000 35.552.624 70.882.693	10.000.000 13.052.624 12.500.000 35.552.624 108.482.693

Despite the deadline of more than one year, commercial paper contracts are considered in the short-term as is considered that these contracts mature on the dates of the complaint.

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018 (Amounts in Euros)

The item "Leasing" (current and non-current) include liabilities for leasing contracts, related to the purchase of facilities and equipment.

The detail of this caption, as well as the reimbursement plan can be summarized as follows:

			Non-current
Contract	Leasing	Current	2019	2020	2021	> 2021	TOTAL	TOTAL
Diverse	Industrial equipment Capital	5.930.069	5.058.018	3.907.707			2.780.941 1.305.958 13.052.624	18.982.693

The maturity of the outstanding loans as per December 31, 2017 can be detailed as follows:

DEC'18		< 1 year	1 - 3 years	3 - 5 years	> 5 years	Total
Bank loans		10.000.000				10.000.000
Mutual loans				10.000.000		10.000.000
Commercial paper		19 400.000				19.400.000
Leasing		5.930.069	8.965.725	3.832.778	254 120	18.982.693
Bond loan				12.500.000		12.500.000
	Total	35,330,069	8,965,725	26.332.778	254 120	70.882.693

The interest payment plan are as follows:

Interest Aging	2019	2020	2021	2022	> 2022	Total
Mutual Loan Leasing Bond loan	220,521 490,907 316.840	221.125 283 461 318.576	54.375 160 876 315.972	72.172 316.840	22,932 316 840	496.021 1.030.350 1.585.069

18. ACCOUNTS PAYABLE

As of 31 December 2018 and 2017 this caption was composed of current accounts with suppliers, which end at short-term.

19, OTHER ACCOUNTS PAYABLE

As of December 31, 2018 and 2017 the detail of other accounts payable was as follows:

Other accounts payable	Current
	DEC'18	DEC'17
Personnel	117,814
Down payments	202.521	295.026
Public entities	12.375.913	9,886,665
Shareholders	15.542	10.618
Other accounts payable	368	180.856
	12.712.158	10,373,165

(Amounts in Euros)

The caption for Public Entities at December 31, 2018 and 2017 is as follows:

	DEC'18	DEC17
ncome taxes withheld	156.484	153.509
Value added taxes	9.497.616	7.392.891
Employee's social contributions	230 685	239 568
Local taxes	207,376	233.680
Others	2.283.752	1.867.017
	12,375,913	9.886.665

20, OTHER CURRENT LIABILITIES

As of December 31, 2018 and 2017 the detail of other current liabilities was as follows:

	DEC'18	DEC'17
Creditors for accrued expenses
Vacations pay and bonus	2.566.465	1.962.660
Sales campaigns	3.980.208	4.526.941
nterest	236,354	126,409
Anticipated costs related with sold vehicles	779.842	1.209.909
nsurance	155,822	392.790
Car tax related with disposed vehicles not registered	804 876	451.103
Warranty claims	5.729	48.249
Personnel	1.202.807	599.657
Publicity	81.482	47 701
Anticipated costs related with other supplies	347.238	423.167
Royalties	71.170	69.579
Others		12.000
	10.231.993	9.870.166
Deferrals
Maintenance vehicles contracts	6.994.534	6.128.021
Subsidies	28.653	501.360
Debtors interest	1.062	3.715
Signage to be charged to dealers	29.283	37.657
Intercompany margin deferral	4.339.479	2.776.125
Others	126,222	120.798
	11.519.232	9.567.676
	21.751.225	19.437.843

(Amounts in Euros)

21. POST-RETIREMENT OBLIGATIONS

Toyota Caetano (together with other associated and related companies) incorporated, by public deed dated December 29, 1988, the Salvador Caetano Pension Fund, which was subsequently updated in February 2, 1994, December 29, 1995, April 30, 1996, August 9, 1996, July 4, 2003, December23, 2002, July 4, 2003, February 2, 2007, December 30, 2008, December 23, 2011 and December 31, 2013.

The Pension Fund was set up to, while Toyota Caetano maintains the decision to make contributions to the referred fund, provide employees (beneficiaries), at their retirement date, the right to a pension complement, which is not subject to update and is based on a percentage of the salary, among other conditions setting up a defined benefit plan. To cover these liabilities, an Autonomous Fund (which is managed by BPI-Vida e Pensões, S.A.) is set up.

In sequence of a request to change the condition of that pension complement made near the "ISP - Instituto de Seguros de Portugal" the defined benefit plan as of January 1,2008, only the current retired workers and ex-employees with acquired rights, as well as for all the current employees with more than 50 years and more than 15 years of service of the company.

The actuarial presumptions used by the fund manager include the Mortality Table and disability TV 73/77 and SuisseRe 2001, respectively, as well as salary increase rate, pensions increase rate and average rate of return of 1%, 0% and 1,57% to 2018, respectively (1%, 0% and 1,6% to 2017).

The variation of the Fund responsibilities of the Company with the Defined benefit plan in 2018 and 2017 can be summarized as follows:

Responsibilities at January 1, 2017	20.963.414
Cost of the current services	37.921
Cost of interest	335 415
(Gains) and actuarial losses	217.819
Pension payment	-1.555.367
Transfers
Others
Responsibilities at December 31, 2017	19.999.202
Responsibilities at January 1, 2018	19.999.202
Cost of the current services	32.116
Cost of interest	308.373
(Gains) and actuarial losses	831.146
Pension payment	-1.515.972
Transfers
Others	50.123
Responsibilities at December 31, 2018	19.704.988

(Amounts in Euros)

The allocation during 2018 and 2017 to both plans (Defined benefit plan and Defined contribution plan) can be summarized as follows:

	Defined benefit plan	Defined contribution plan	Total
Fund's value at January 1, 2017	16.379.632	4.737.972	21.117.604
Contributions	188.200	128.751	316.951
Real recovery of the plan assets	1.203.268	370.141	1.573.409
Pension payment (benefit payments)	-1.555.367	-9.716	-1.565.083
Transfers between members		-14.894	-14.894
Used amounts from the CD account (reserve account)			0
Fund's value 31 December de 2017	16.215.733	5.212.254	21.427.987
Fund's value 31 December de 2017	16.215.733	5.212.254	21.427.987
Contributions		91.364	91 364
Contributions of reserve account		238.503	238,503
nterest	247,838		247 838
Real recovery of the plan assets	408 437	127.169	535 606
Pension payment (benefit payments)	-1.601.268	-29 650	-1.630.918
Transfers between members			O
Used amounts from the CD account (reserve account)		-238.503	-238.503
Others		-492	-492
Fund's value 31 December de 2018	15.270.740	5 400 645	20,671,385

At 31 December 2018 and 2017, the Pension Fund's portfolio that covers the defined benefit plan was as follows:

	0/0	Value	%	Value
PORTFOLIO	DEC/2017		DEC/2016
Stocks	10.5%	1.603.428	9.6%	1.556.710
Bonds with fixed rate	28.4%	4.336.890	38,2%	6.196.032
Bonds with variable rate	7.7%	1.175.847
Real estate	39.4%	6.016.672	38.2%	6.194.410
Cash	7.0%	1.068.952	11.7%	1.890.754
Other assets	7.0%	1.068.952	2.3%	376-205
Total	100,0%	15.270.740	100.0%	16.215.733

The evolution of the pension fund's value and Toyota Caetano Portugal's responsibilities related with the defined benefit plan are as follows:

Defined benefit plan	2018	2017
Responsibility's Values	19.704.988	19.999.202
Fund Value	15.270.740	16.215.733

The Toyota Caetano Portugal responsibilities shown above was safeguarded through the creation of an accrual of costs for about 6 million Euros (5,6 million Euros in 31 December 2017) reflected in the Balance sheet caption of Pension Fund Liabilities.

22. PROVISIONS AND IMPAIRMENTS

During 2018 and 2017, the following movements occurred in impairments:

(Amounts in Euros)

DEC18	Opening Balances	Increases	Disposals	Write-offs	Final Balances
Doubtful accounts receivable	5,412,762	14 029	(518.801)	(19.807)	4.888.184

DEC17	Opening Balances	Increases	Disposals	Write-offs	Final Balances
Doubtful accounts receivable	5.702.310	38906,77	(312 450)	(16.004)	5 412 762

23. SALES AND SERVICES RENDERED BY GEOGRAPHIC MARKETS

Sales and services rendered by geographic markets, in 2018 and 2017, was as follows:

	2018	2017	Var (%)	2018	2017	Var (%)	2018	2017	Var (%)
	National market			External market				Tota
Light vehicles	250 403 447	207 449 592	21%	54.817.823	45 512 562	20%	305 221 270	252 962 154	21%
Heavy vehicles				619 623	593 433	4%	619,623	593 433	4%
Industrial vehicles	14 693 731	16 440 743	-11%	143 728	668.803	-79%	14.837.459	17.109.546	-13%
Spare parts and accessories	40.062.640	37.829.77	6%	604 396	599 767	1%)	40.667.036	38 429 537	6%
Others	2 308 686	4 112 393	-44%	8 629	3 937	119%	2 317 315	4 116 330	-44%
	307 468 503	265 832 498	16%	56.194.199	47 378 501	19%	363 662 703	313.210.999	16%

24. SEGMENTS INFORMATION

For the periods ended December 31, 2018 and 2017, the reporting by segments is as follows:

	National					External
DEC'18	Vehicles		Industrial equipment		Others	Vehicles		Industrial equipment			TOTAL
	Industry	Commercial	Commercial	Services	Rental		Industry	Commercial	Commercial	Services	Rental
PROFITS
External sales	91.034	287.576.751	14.693.731	5.106.987			47.360.202	8.665.039	143.728	25.230		363.662.703
Supplementary income					13.131.887						7.425	13.139.312
INCOME
Operational income	7.028	10.703.776	1.249.953	3.047 468	815,433		20.613	319.055	21.041	13.706	2.715	16.200.787
Financial income	144	1.769.288	39.036	17.072	42.674		163.443	27.796	466	89	23	2.060.031
Gains in subsidiaries						2.295.780						2.295.780
Net income	5.108	6.628.466	898,375	2.248.241	573,307	2.295.780	-105.965	216.084	15.265	10.102	1.998	12.786.759
OTHER INFORMATION
Total assets	27.453.036	181.302.262	6,966,555	1.971.803	24.284.451	44.596.491						286,574,598
Total liabilities	4.846.028	112.139.635	1.725.531	266.613	25.983.753							144.961.560
Investments in subsidiaries (1)						44,596,491						44.596.491
Capital Expenditure (2)	554.690	168,200		118.859	4.167.989							5.009.739
Depreciation (3)	717.605	1.634.661	71.145	66.098	5.869.066							8.358.574

	National						External
DEC'17	Vehicles		Industrial equipment		Others	Vehicles		Industrial equipment			TOTAL
	Industry	Commercial	Commercial	Services	Rental		Industry	Commercial	Commercial	Services	Rental
PROFITS
External sales	20.233	244.668.661	16.440.742	4.702.864			39.348.115	7333.207	668.804	28.375		313.210.999
Supplementary income					12.216.763						9.980	12.226.743
INCOME
Operational income	3.471	5.302.783	1.121.037	2.757.623	996.694		1.036.192	86.229	8.518	7.562	4.109	11.324.219
Financial income	63	1.742.497	38.515	16.965	44.121		133.482	25.275	2.175	104	ਤੇ 8	2.003.235
Gains in subsidiaries						2,330,890						2.330.890
Net income	2.56	2.677.394	813.677	2.060.012	716,001	2.330.890	678.521	45.816	4.768	5.606	3.060	9.338.305
OTHER INFORMATION
Total assets	31.457.616	168.619.552	9,918,159	1.752.076	25.403.933	40.836.444						277.987.779
Total liabilities	7.736.010	110.451.028	2.043.834	313.210	26.731.462							147.275.544
Investments in subsidiaries (1)						40-589-226						40.589.226
Capital Expenditure (2)	194 884	1.054.479		117.514	6.999.186							8.366.063
Depreciation (3)	1.218.162	1.949.324	72.020	69.214	4.993.731							8.302.452

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018 (Amounts in Euros)

25. SUPPLIES

At 31 December 2018 and 2017, supply expenses were as follows:

		DEC'17
Subcontracts	94.068	71.077
Specialized services	29.436.135	27.342.318
Professional services	4.194.923	3.318.486
Advertising	19.085.799	18.901.545
Vigilance and security	366.239	391 617
Professional fees	836.133	708.036
Commissions	263.141	43.943
Repairs and maintenance	1.229.425	970 623
Others	3.460.476	3.008.067
Materials	9.614.420	11.251.552
Tools and utensils	90.616	114 160
Books and technical documentation	327,024	313.489
Office supplies	154,948	237.661
Gifts	17.326	24.039
Others	9.024.506	10.562.203
Energy and fluids	1.186.811	1.020.033
Electricity	584.292	464 447
Fuel	550 426	494 515
Water	52.094	61.071
Others
Travel and transportation	2.905.103	2.556.213
Traveling expenses	1.467.352	1.259.263
Personnel transportation	97.287	92.895
Transportation of materials	1.340.465	1.204.055
Others
Other supplies	2.693.301	2.499.018
Rent	500 423	420.398
Communications	419 661	469.332
Insurance	892.539	793.711
Royalties	446.094	420,680
Notaries	9.353	10.671
Cleaning and comfort	425.232	384 225
	45.929.839	44,740,211

26. PAYROLL AND AVERAGE NUMBER OF PERSONNEL

At 31 December 2018 and 2017, payroll expenses were as follows:

(Amounts in Euros)

	DEC'18	DEC'17
Payroll - management	397.465	371 368
Payroll - other personnel	9.879.359	9.133.635
Benefit plans	613.728	797.652
Termination indemnities	389 555	508.886
Social Security contributions	3.082.327	3.020.705
Workmen's insurance	244.860	211,685
Others	1.633.276	1.570.866
	16.240.571	15.614.797

During the years ended as of December 31, 2017 and 2016, the average number of personnel was as follows:

ltems	DEC'18	DEC'17
Employees	362	364
Production personnel	149	154
	511	518

27. OTHER OPERATING EXPENSES AND OTHER GAINS

As of 31 December, 2018 and 2017, the captions "Other Expenses" and "Other Gains" were as follows:

Other gains	DEC/2017	DEC/2017
Lease equipment	13.139.312	12.226.743
Rents charged (Note 6)	3.330.919	3.338.592
Subsidies	2.839.935	2.006.972
Advertising expenses and sales promotion recovered	4.327.131	2.793.801
Gains on inventories	70.456	107.270
Gains on fixed assets	1.823.358	1.837.961
nvestements subsidies	472-707
Obtained cash discounts	8.682	8.765
Other	15.002.429	15.049.063
	41.014.930	37.369.167

The caption Other refers provided services and warranties' recovery.

(Amounts in Euros)

Other expenses	DEC'18	DEC'17
Tax	630.805	606.532
Bad debts	353.307
Losses on inventories	66.554	37.372
Cash discount granted	5.562	1.677
Losses on fixed assets	171.531	43.443
Donations	4 500	10.525
Other	11.095.493	8.343.343
	12.327.753	9.042.893

The caption Other Expenses includes trade incentives and bonuses granted to dealers.

28. FINANCIAL INCOME AND EXPENSES

As of 31 December, 2018 and 2017, the captions "Financial Income" and "Financial Expenses" were as follows:

Interest and similar income	DEC/2017	DEC/2017
nterest	70	70
Losses for fair value	28.425	28.425
Other	281 335	281,335
	309,830	309,830

Interest and similar expenses	DEC/2017	DEC/2017
nterest	1.701.186	1.701.186
Other	611,879	611,879
	2.313.065	2.313.065

29. FINANCIAL ASSETS AND LIABILITIES

We present below a summary table of the Company's financial instruments as of December 31, 2018 and 2017:

(Amounts in Euros)

Financial assets and liabilities		Financial assets		Financial liabilities
	Note	DEC'18	DEC'17	DEC'18	DEC'17
Other financial investments	10	3.492.302	3.492.302
Accounts receivable	12	110.786.784	106.694.935
Other accounts receivable	13	3.629.670	2.454.538
Loans	17			70.882.693	76.511.196
Other accounts payable	19			336,245	486 500
Accounts payable	18			35.020 440	33.491.227
Other current liabilities	20			17.621.406	17 475 182
Cash and cash equivalents	র্ব	15.003.395	14.225.420

Financial assets and liabilities at fair value

Financial assets and liabilities at fair value		Financial assets		Financial liabilities
	Note	DEC'18	DEC'17	DEC'18	DEC'17
Other financial investments	10	3.492.302	3.492.302

30. RELATED PARTIES

TOYOTA CAETANO PORTUGAL GROUP COMPANIES

Due and payable balances with Group and Associated companies, which, as of 31 December 2018 and 2017, were recorded in the captions "Accounts receivable", "Accounts payable", "Other financial investments" and " Shareholders", as follows:

Accounts Receivable Accounts Payable	31/DEC/2018 78.824.686 -1.321.795	31/DEC/2017 78.168.268 -157.033
Shareholders
- RETGS's Companies (Note 13) . Saltano, SGPS, S.A. . Caetano Renting, S.A. . Caetano Auto, S.A.	139.134 -501.835 3.953.145	145.081 -494.919 2.452.195
	3.590.444	2.102.357
Other Financial Investments (Note 10)
. Saltano, SGPS, SA.		3.432.799 3.432.799

Accounts Receivable and Accounts Payable (Notes 12 and 18)

Balances and transactions details between Toyota Caetano Portugal and Related Parties can be summarized as follows:

NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

2018		Commercial debt		Products		Fixed assets		Services		Others
	Receivable I	Pavable I	Sales		Purchases Acquisitions Disposals		Rendered I	Obtained	Expenses	Gains
Caetano Auto. S.A.	74 871 686		-1.321.740 -160.336.778	469 699		0 -2.277.574		6,863,145	11.762.310	1 703 483
Caetano Renting, S.A.	1.813.072	-55	-9 658 093	14 954 154		-134 115		83 536	987 519	-411 997
Caetano Auto CV, SA	2 139 613		8.792 313			೧				-523 499
Saltano - Investimentos e Gestão, Sgps, S.A.	27				- 0 - 0 - -			0 - 1 - 1 - 1 - 0 - 0 - 1 - 0 - 0 - 1 - 0 - 1 - 1 - 0 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1		-22

2017	Commercial debt		Products		Fixed assets		Services		Others
	Receivable I	Pavable	Sales		Purchases Acquisitions Disposals		Rendered I	Obtained	Expenses	Gains
Caetano Auto. S.A.	63 513 662		-156.926 -138.188.796	505 586		0 3 248 816		6 813.184	13.565 308	-4 565 839
Caetano Renting, S.A.	12.375.241		-107 - 16,937,350 - 11,972,485			-89.361		46.524	722 580	547 503
Caetano Auto CV. SA	2,280,365		-7 540 267	2 000				こ		-728.870

RELATED PARTIES

Intercompany balances and transactions related with accounts receivable and payable were as follows:

Other related companies	Commercial debt			Products		Fixed assets	Services			Others
	Receivable	Payable	Sales	Purchases	Acquisitions	Disposals	Rendered	Obtained	Expenses	Gains
Amorim, Brito & Sardinha, Lda	167,28	0,00	0,00	0,00	0,00	0,00	0,00	0,00	0,00	-2.804,96
Atlântica - Companhia Portuguesa de Pesca, S.A.	5.173	0	0	0	0	0	0	0	0	-17
Auto Partner - Imobiliána, S.A.	0	0	0	0	0	0	0	0	0	-17
Caetano Active, S.A.	649	0	-1.194	0	0	0	0	0	0	-27
Caetano Aeronautic, S.A.	48 531	8 659	-548	0	0	0	0	310.226	311.829	-449 157
Caetano Baviera - Comércio de Automóveis, S.A.	218,027	-1.848	3 358 558	2 572	0	0	0	143, 239	608 581	-246 859
Caetano City e Active (Norte), S.A.	338 091	-90 346	3 496 445	6 626	0	-131 348	0	104.569	279 244	46 247
Caetano Drive, Sport e Urban, S.A.	-2.620	0	-2.390	0	0	0	0	0	0	673
Caetano Energy, S.A.	7.328	0	-1.951	0	0	0	0	0	0	-6 692
Caetano Formula East Africa, S.A.	2 042	0	0	0	0	0	0	0	0	-3 738
Caetano Fórmula West Africa, S.A.	330	0	0	0	0	0	0	0	0	-297
Caetano Fórmula, S.A.	-1.119	0	-3 988	0	0	0	0	0	0	-1.204
Caetano Motors, S.A.	4.121	0	-6.034	0	0	0	0	0	0	-1 723
Caetano Move Africa, S.A.	84	0	-1.099	0	0	0	0	0	0	-95
Caetano Parts, Lda.	310	0	-2.728	230	0	0	0	2.241	2.241	-1.318
Caetano Power, S.A.	933	0	-3 872	0	0	0	0	0	0	513
Caetano Retail España, S.A.U.	0	0	0	0	0	0	0	0	0	-5 635
Caetano Retail, S.G.P.S., S.A.	233 152	0	-181	0	0	0	0	0	0	-328 861
Caetano Squadra Africa, S A	383	0	0	0	0	0	0	0	0	-378
Caetano Star, S.A.	7.222	-978	-2.601	0	0	0	0	239	1.034	-28 620
Caetano Technik, S.A.	004	0	-1.457	0	0	0	0	0	0	-2 845
CaetanoBus - Fabricação de Carroçarias, S.A.	4 160 528	-163 447	-79 144	0	9.000	-4 930	0	182 552	252.046	-2.526 146
Caetsu Publicidade, S.A.	5 692	-556 288	O	0	0	0	0	3 244 764	3,255,334	-6 782
Carplus - Comércio de Automóveis, S.A.	1.614	0	0	0	0	0	0	450	450	-15.916
Choice Car, S.A.	3 451	-758	0	0	0	0	0	19 573	19 631	-18 303
	1.531		0			0	0			-10.964
COCIGA - Construções Civis de Gaia, S.A.	0	433 081		0	185 467			227 476	227 476
Covim - Soc. Agrícola, Silvícola e Imobiliána, S.A.		0	0	0	0	0	0	2.000	2.000
Finlog - Aluguer e Comércio de Automóveis, S.A.	31.123	-258 890	-378.196	231.897	0	0	0	451.842	538 535	-58.813
Fundação Salvador Caetano	23	0	0	0	0	0	0	0	0	-21
Grupo Salvador Caetano, (S.G.P.S.), S.A.	0	0	0	0	0	0	0	0	0	-85
Guérin - Rent-a-Car (Dois), Lda	212.748	-107 308	-71.592	78.716	0	0	0	10.159	10.159	-108.272
Hyundai Portugal, S.A.	5 631	0	0	0	0	0	0	0	0	-46 267
Ibericar Motors Cádiz, S L	0	0	0	0	0	0	0	0	0	-385
lbericar Reicomsa, S.A.	0	0	0	0	0	0	0	0	0	-752
Lidera Soluciones, S.L.	0	-67.535	0	0	0	0	0	71.924	71.924
Lusilectra - Veículos e Equipamentos, S.A.	11.783	-47.847	-35.779	56.614	5.253	0	0	121.859	155.920	-56.772
Mapfre - Seguros Gerais, S.A.	C	0	0	0	0	0	0	0	13 444
MDS Auto - Mediação de Seguros, S.A.	2.312	0	0	0	0	0	0	0	0	-6.017
Movicargo - Movimentação Industrial, Lda	1 996	-496 305	0	890 759	0	0	0	619 595	659 348	-5.897
P.O.A.L. - Pavimentações e Obras Acessórias, S.A.	17.806	0	0	0	0	0	0	0	0
Portianga - Comércio Internacional e Participações, S.A.	103 729	-303 501	-146 486	દ્વાર	0	0	0	251.665	251.665	-75 787
RARCON - Arquitectura e Consultadoria e Mediação Imobiliária, S.A.	0	-39 655	0	0	6.340	0	0	94.742	94 742
Rigor - Consultoria e Gestão, S.A.	24.964	-954 256	-178	0	26.857	0	0	2.320.788	2.415.788	-251 641
Robert Hudson, LTD	1.161	0	-2.994	0	0	0	0	0	0	-1.474
Salvador Caetano Auto Africa, (S.G.P.S.), S.A.	દિર	0	0	0	0	0	0	0	0	-145
Salvador Caetano Auto, (S.G.P.S.), S.A.	48	0	0	0	0	0	0	0	0	-124
Salvador Caetano Capital, (S.G.P.S.), S.A.	31	0	0	0	0	0	0	0	0	-26
Salvador Caetano Equipamentos, S.A.	0	0	0	0	0	0	0	0	0	ರ್ಥಿ
SIMOGA - Sociedade Imobiliária de Gaia, S.A.	1,374	0	0	0	0	0	0	0	0
Sol Green Watt, S.L.	200	0	0	0	0	0	0	0	0	-163
	1.902	0	0	0	0	0	0	0	0	-13 437
Sózó Portugal, S.A.	21 360			39 649 935	0	0	0
Toyota Motor Corporation		-4.021.475	0					71.049	429.125	-137.141
Toyota Motor Europe, Nw'Sa	4 482 577	-18 137 237	45 926 494	222 831 351	0	0	0	490.762	-4.967.015	4 379 273
Turispaiva - Sociedade Turística Paivense, S.A. VAS Africa (S G P S ), S.A.	138 105	0 0	0 0	0 0	0 0	0 0	0 0	0 0	0 0	-1 448 -85

(Amounts in Euros)

31. CONTINGENT ASSETS AND LIABILITIES

As of 31 December, 2018 and 2017, Toyota Caetano had assumed the following financial commitments:

Responsabilities	DEC'18	DEC'17
Security guarantee	4.000.000	4.000.000
Other guaranties	1	1.394.118
	4.000.000	5.394.118

(Amounts in Euros)

The financial commitments classified Security Guarantee include guarantee on imports provided to Customs Agency.

As a result of loans amounting to 15 million Euros Toyota Caetano granted the respective financial institutions mortgages on properties valued at the time of the referred loans, approximately 23,4 million Euros.

Litigation in progress:

The judicial claim presented by a former agent, that was pending a decision of the appeal presented in Supreme Court, was concluded without any, as was expected by the Board of Directors, responsibility to the Company.

End-of-life vehicles

In September 2000 the European Commission voted on a directive regarding end-of-life vehicles and the responsibility of Producers/Distributors for dismantling and recycling them.

Producers/Distributors will have to bear at least a significant part of the take back of vehicles put on the market as of July 1, 2002 and from January 1, 2007 for vehicles put on the market.

This legislation will impact Toyota vehicles sold in Portugal. Toyota Caetano and Toyota are closely monitoring the development of Portuguese National Legislation in order to access the impact on their financial statements.

Is our conviction in face of the studies already done into the Portuquese market, and taking notice on the possible valorization of the residues from the end-of-life vehicles dismantling, that the effective impact of this legislation in the Company accounts will be reduced or null.

Meanwhile and according to the legislation introduced (Dec./Law 196/2003), the Company contracted with "ValorCar - Sociedade de Gestão de Veículos em Fim de Vida, Lda" - a licensed entity for the management of an integrated system of ELV- the transfer of the responsibilities in this process.

Information related to environmental area

The company adopts the necessary measures relating to the environment, aiming to fulfil current applicable legislation.

The Toyota Caetano Board of Directors does not estimate that there are risks related to the environmental protection and improvement, not having received any infraction related to this matter during 2018.

32. EARNINGS PER SHARE

The earnings per share for the year ended as of December 31, 2018 and 2017 were computed based on the following amounts:

(Amounts in Euros)

	DEC'18	DEC'17
Net income	12.786.759	9.338.305
Number shares	35.000.000	35.000.000
Earnings per share (basic and diluted)	0,37	0,27
Comprehensive income	12.786.759	9.338.305
Number shares	35-000-000	35.000.000
Comprehensive income (basic and diluted)	0,37	0,27

33. REMUNERATION OF BOARD MEMBERS

The remuneration of the board members in Toyota Caetano Portugal, S.A. during the years 2018 and 2017, was as follows:

Board Members	DEC'18	DEC'17
Board of Directors	384.724	352.608
Board of Auditors	8.400	8.400

34. REMUNERATION OF STATUTORY AUDITOR

The remuneration of the Statutory Auditor, PricewatherhouseCoopers & Associados - S.R.O.C., Lda. for 2018 and 2017, was as follows:

	DEC'18	DEC'17
Total fees related statutory audit	25.0001	25.000
Total fees for limited accounts review	3.000	3.000
Total fees for other services of fiability assurance	1.000	1.000
	29.000	29.000

35. SUBSEQUENT EVENTS

Since the end of 2018 to the present date, and in terms of relevant facts, no significant events occurred

(Amounts in Euros)

36. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors on 2019. According to the Portuguese Commercial Companies Code, it is possible the amended for these Financial Statements, after their approval by the Board of Directors

CHARTERED ACCOUNTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS JOSE REIS DA SILVA RAMOS – President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI MANUEL MACHADO DE NORONHA MENDES

Consolidated Accounts

December 2018

CONSOLIDATED FINANCIAL HIGHLIGHTS

	dec-18	dec-17
TURNOVER	446.874.810	390-034-712
CASH-FLOW	41.700.225	31.139.333
INTEREST AND OTHERS	1.502.881	2.575.406
PERSONNEL EXPENSES	41.164.197	38.634.544
NET INVESTMENT	36.210.335	28.213.296
NUMBER OF EMPLOYEES	1.529	1.530
NET INCOME WITH MINORITY INTEREST	12.872.564	9.431.461
NET INCOME WITH OUT MINORITY INTEREST	12.786.759	9.338.305
DEGREE OF AUTONOMY	43.08%	44.26%

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2018 AND 2017

	ASSETS	Notes	31/12/2018	31/12/2017
NON-CURRENT ASSETS
Goodwill		8	611.997	611.997
Intangible assets		5	360.364	412.847
Tangible fixed assets		6	112.792.692	97.821.610
Investment properties		7	14.330.714	16.363.198
Instruments at fair value through capital		9	3.633.413
Available for sale financial assets		9		3.732.500
Deferred tax assets		14	2.834.930	2.313.378
Accounts receivable		11	494 293
				169.252
	Total non-current assets		135.058.403	121 424.782
CURRENT ASSETS
nventories		10	99.059.426	96.002.214
Accounts receivable		11	56.709.522	52.022.943
Other debtors		12	5.818.605	6.541 709
Other current assets		13	6.331.380	5.221.453
Cash and cash equivalents		15	17.075.155	17.267.570
	Total current assets		184.994.088	177.055.889
	Total assets		320.052.491	298.480.671
SHAREHOLDERS' EQUITY & LIABILITIES
EQUITY
Share capital			35.000.000	35.000.000
Legal reserve			7 498.903	7.498.903
Revaluation reserves			6.195.184	6.195.184
Translation reserves			(1.695.238)	(1.695.238)
Fair value reserves - Instruments at fair value through capital			552.731	651.818
Other reserves			76.061.568	73.723.263
Net income			12.786.759	9.338.305
		16	136.399.907	130.712.235
Non-controlling interests		17	1.473.222	1.387.418
	Total equity		137.873.129	132.099.653
LIABILITIES
NON-CURRENT LIABILITIES
Loans		18	38.465.142	26.914.001
Defined benefit plan liabilities		23	8.886.983	8.981.000
Provisions		24	881.547	514.525
Deferred tax liabilities		14	1.602.616	1.635.144
	Total non-current liabilities		49.836.288	38.044.670
CURRENT LIABILITIES
Loans		18	52.538.913	53.024.793
Accounts payable		19	39.907.558	40.256.759
Other creditors		20	14.783.849	13.207.610
ncome tax receivable		21	1.939.181	1.716.581
Other current liabilities		22	22.734.556	20.130.605
Defined benefit plan liabilities		23	439.017
	Total current liabilities		132.343.074
				128.336.348
	Total liabilities		182.179.362	166.381.018
	Total liabilities and shareholders' equity		320.052.491	298.480.671

(Amounts expressed in Euros)

The annex integrates the Consolidated Statement of Financial Position at 31 December 2018.

CHARTERED ACCOUNTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS – President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI Manuel Machado DE Noronha Mendes

CONSOLIDATED INCOME STATEMENT

FOR THE PERIODS ENDED AT 31 DECEMBER 2018 AND 2017

(Amounts expressed in Euros)

		Notes	31/12/2018	31/12/2017
Operating Income: Sales Services rendered Other operating income Variation of products		28 28 31 10	418.479.481 28.395.329 50.584.045 (3.397.773) 494.061.082	365.763.558 24.271.153 46.543.561 3.164.485 439.742.757
Operating expenses: Cost of sales External supplies and services Payroll expenses Depreciations and amortizations Provisions Impairment losses Other operating expenses		10 29 30 5, 6 and 7 24 24 31	(362.262.995) (42.314.240) (41.164.197) (23.423.309) (495.968) (962.682) (4.300.431) (474.923.822)	(321.111.526) (43.229.565) (38.634.544) (18.611.512) (212.991) 27.128 (2.541.205) (424.314.215)
Expense and financial losses Income and financial gains	Operating results	32 32	19.137.260 (1.856.395) 353.513	15.428.542 (2.608.769) 33.363
Income tax for the year	Profit before tax	25	17.634.378 (4.761.815)	12.853.136 (3.421.674)
	Net profit for the period		12.872.563	9.431.462
Net profit for the period attributable to: Equity holders of the parent Non-controlling Interests			12.786.759 85.804 12.872.563	9.338.305 93.157 9.431.462
Earnings per share:	from continuing operations Basic	26	0,365 0,365	0,267 0,267
	from continuing operations Diluted	26	0,365 0,365	0,267 0,267

The annex integrates the Consolidated Income Statement at 31 December 2018.

CHARTERED ACCOUNTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS – President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI Manuel Machado de Noronha Mendes

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY AT 31 DECEMBER 2018 AND 2017

(Amounts expressed in Euros)

						Equity attributable to the parent compan
	Share capita	reserve Legal	Revaluation reserves	I ranslation reserves	Fair value reserves	reserves Other	reserves Tota	income Net	Subtota	Non-controlling interests	Tota
alances at 31 of December 2016	35.000.000	7.498.903	6.195.184	(1,695,238)	402.446	73.024.661	85.425.956	5.950.756	126.376.712	1,294,261	127.670.973
Fair value changes of instruments at tair value through capital Application of the consolidated net income 2016 Changes in the period: Others					372 249,372 249.	5.950.756 984 602 2.154) 9	5.950.756 249,372 197.974 2.154) 9	(5.950.756) 5.950.756	249,372 247,218 (2.154)		247.218 249,372 (2.154)
Consolidated comprehensive income Consolidated net profit for the period					249.372		249.372	9.338.305 9.338.305	9.338.305 9.587.677	93.157 93.157	9.431.462 9.680.834
I ransactions with equity holders Distributed dividends						5.250.000)	(5,250,000)		5.250.000)		(5.250.000)
Balances at 31 of December 2017	35,000,000 7,498,903		6.195.184	(1,695,238)	651.818	73.723.263	86.373.930	9.338.305	130.712.235	1.387.418	132.099.653
alances at 31 of December 2017	35.000.000 7.498.903			6.195.184 (1.695.238)	651.818	73.723.263	86.373.930	9.338.305	130.712.235	1.387.418	132.099.653
Fair value changes of instruments at fair value through capital Application of the Consolidated Net Income 2017 Changes in the period:					99.087 99.087	9.338.305 9 30 338 6	9.338.305 8 99.087 239.21 6	(9.338.305) 9.338.305	99.087) 99.087		(99.087) 99.087)
Consolidated comprehensive income Consolidated net profit for the period					(99.087)		99.087)	12,786,759 12.786.759	2.786.759 12,687,672	85.804 85.804	12.872.563 12.773.476
I ransactions with equity holders Distributed dividends						7.000.000) (7.000.000)			7.000.000)
Balances at 31 of December 2018	35.000.000	7.498.903	6.195.184	(1.695.238)	552.731	76.061.568	88.613.148	12.786.759	136.399.907	473.222	37.873.129
	The annex integrates this Consolidated Statement of Changes in Shareholder's Equity at 31 December 2018.
CHARTERED ACCOUNTANT											BOARD OF DIRECTORS

MARIA ANGELINA MARTINS CAETANO RAMOS JOSÉ REIS DA SILVA RAMOS – President SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON

ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

RUI MANUEL MACHADO DE NORONHA MENDES

CONSOLIDATED STATEMENT OF THE COMPREHENSIVE INCOME AT 31 DECEMBER 2018 AND 2017

(Amounts expressed in Euros)

	31/12/2018	31/12/2017
Consolidated net profit for the period, including non-controlling interests	12.872.563	9.431.462
Components of other consolidated comprehensive income, net of tax,
that could be recycled by profit and loss:
Fair value changes ofAvailable for sale financial assets (Note 9)		249 372
Components of other consolidated comprehensive income, net of tax,
that could not be recycled by profit and loss:
Fair value changes of instruments at fair value through capital (Note 9)	(99.087)
Consolidated comprehensive income	12.773.476	9.680.834
Attributable to:
Equity holders of the parent company	12.687.672	9.587.677
Non-controlling interests	85.804	93.157

The annex integrates this Consolidated Statement of Comprehensive Income at 31 December 2018.

CHARTERED ACCONTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS – President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI MANUEL MACHADO DE NORONHA MENDES

CONSOLIDATED CASH FLOWS STATEMENT AT 31 DECEMBER 2018 AND 2017

(Amounts in Euros)

OPERATING ACTIVITIES	2018	2017
Collections from customers	545.543.957	396.385.262
Payments to suppliers	(460.040.730)	(373.591.503)
Payments to employees	(32.573.672)	(30.393.187)
Operating Flow	52.929.555	(7.599.428)
Payments of income tax	(5.093.294)	(1.732.358)
Other collections/payments related to operating activities	(24.889.329)	5.327.277
Cash Flow from Operating Activities	22.946.932	(4.004.509)

INVESTING ACTIVITIES

Collections from: Investments properties Tangible fixed assets Interest and other income Dividends		2.220.000 672.382 12.554 339.700	3.244.636	935.000 1.792.530	2-727-530
Payments to: Investments Investments properties Tangible fixed assets Intangible assets		(20.775) (4.793.391) (153.701	(4.967.867)	(2.154) (8.095) (3.095.119) (61.875)	(3.167.243)
	Cash Flow from Investment Activities		(1.723.231)		(439,713)

FINANCING ACTIVITIES

Collections from: Loans (Note 18) Financial lease		306.483.075	306.783.075	50.029.851 7.650.092	57.679.943
Payments to:
Loans ( Note 18)		(310.983.075)		(42.042.299)
Lease down payments		(7.731.336)		(611.981)
Interest and other costs		(2.189.704)		(2.593.981)
		(6.995.076)	(327.899.191)
Dividends				(5.276.080)	(50.524.341)
	Cash Flow from Financing Activities		(21.416.116)		7.155.602

CASH

Cash and cash equivalents at beginning of period (Note 15)	17.267.570	14.556.190
Cash and cash equivalents at end of period (Note 15)	17.075.155	17.267.570
Net Flow in Cash Equivalents	(192.415)	2.711.380

The annex integrates this Consolidated Cash Flows Statement at 31 December 2018.

CHARTERED ACCONTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS – President MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI MANUEL MACHADO DE NORONHA MENDES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

INTRODUCTION 1.

Toyota Caetano Portugal, S.A. ("Toyota Caetano" or "Company") was incorporated in 1946, has its headquarters in Vila Nova de Gaia, and is the Parent Company of a Group of companies ("Toyota Caetano Group" or "Group"), which mainly develop economic activities included in the automotive sector, namely the import, assembly and commercialization of vehicles, bus and coach industry, sale and rental equipment forklifts, sale of vehicles parts, as well as the corresponding technical assistance, creation of training projects and development of human resources, as well the management and rental of own properties, and rental of short or longterm vehicles, with or without driver.

Toyota Caetano Portugal, S.A., belongs to the Salvador Caetano Group (led by Grupo Salvador Caetano S.G.P.S., S.A.), being held directly by Salvador Caetano Auto, S.G.P.S., S.A., since the end of the year of 2016.

Toyota Caetano Group develops its activity mainly in Portugal and Cape Verde.

Toyota Caetano shares are listed in Euronext Lisbon since October 1987.

The attached financial statements are stated in Euros (rounding by unit), as this is the functional currency used in the economic environment where the Group operations and transactions are included in the consolidated financial statements in accordance with the policy described in Note 2.2 b).

MAIN ACCOUNTING POLICIES つ

The main accounting policies adopted in the preparation of the consolidated financial statements are as follows:

2.1 BASIS OF PRESENTATION

These financial statements relate to the consolidated financial statements of Toyota Caetano Group and were prepared according to the IFRS - International Financial Reporting Standards, as issued by the International Accounting Standards Board ("IASB"), the International Accounting Standards (IAS), as issued by the International Accounting Standards Committee ("IASC"), and its respective interpretations - IFRIC and SIC, as issued, respectively, by the International Financial Reporting Interpretations Committee ("IFRIC") and by the Standing Interpretation Committee ("SIC"), that have been endorsed by the European Union, being effective for the annual periods beginning on or after January 1, 2018.

The accompanying consolidated financial statements have been prepared on a going concern basis and having as basis the principle of the historical cost and, in the case of some financial instruments, fair value, based on the accounting records of the companies included in consolidation (Note 4).

The following standards, interpretations, amendments and revisions endorsed by the European Union and mandatory in the fiscal years beginning on or after January 1, 2018, were adopted by the first time in the fiscal year ended at December 31, 2018:

a) The impact of the adoption of the new standards, amendments and interpretations that became effective as of 1 January 2018:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

(i) Standards:

• · IFRS 15 (new), 'Revenue from contracts with customers'. This new standard applies only to contracts with customers to provide goods or services and requires an entity to recognise revenue when the contractual obligation to deliver the goods or services is satisfied and by the amount that reflects the consideration the entity is expected to be entitled to, following a five step approach. The retrospective application, in which comparatives were not restated and the cumulative effect of the new standards on the opening balance of retained earnings on January 1, 2018 was recognized. This standard did not have any impact in the Group financial statements, as evidenced in Note 2.1.2.
• · Amendments to IFRS 15, 'Revenue from contracts with customers'. These amendments refer to additional guidance for determining the performance obligations in a contract, the timing of revenue recognition from a license of intellectual property, the review of the indicators for principal versus agent classification, and to new practical expedients to simplify transition. This amendment did not have any impact in the Group financial statements.
• · IFRS 9 (new), 'Financial instruments'. IFRS 9 replaces the guidance in IAS 39, regarding: (i) the classification and measurement of financial assets and liabilities; (i) the recognition of credit impairment (through the expected credit losses model); and (iii) the hedge accounting requirements for recognition and classification. The group adopted the modified retrospective application, in which the cumulative effect of the new standards on contracts included in the opening balance of retained earnings of January 1, 2018 was recognized. This standard did not have any impact in the Group financial statements, as evidenced in Note 2.1.1.
• · IFRS 4 (amendment), 'Insurance contracts (Applying IFRS 4 with IFRS 9)'. This amendment allows companies that issue insurance contracts the option to recognise in Other Comprehensive Income, rather than Profit or Loss the volatility that could arise when IFRS 9 is applied before the new insurance contract standard is issued. Additionally, an optional temporary exemption from applying IFRS 9 until 2021 is granted to companies whose activities are predominantly connected with insurance, being applicable at the consolidated level. This amendment is not applicable to the Group financial statements.
• · IFRS 2 (amendment), 'Olassification and measurement of share-based payment transactions'. This amendment clarifies the measurement basis for cash-settled share-based payments and the accounting for modifications to a share-based payment plan that change the classification from cash-settled. It also introduces an exception to the principles of IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee's tax obligation associated with a share-based payment and pay that amount to the tax authority. This amendment is not applicable to the Group financial statements.
• · IAS 40 (amendment), 'Transfers of Investment property'. This amendment clarifies when assets are transferred to, or from investment properties, evidence of the change in use is required. A change of management intention alone is not enough to support a transfer. This amendment did not have any impact in the Group financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

• These improvements did not have any impact in the Group financial statements.

(ii) Interpretations:

· IFRIC 22 (new), 'Foreign currency transactions and advance consideration'. An Interpretation of IAS 21 'The effects of changes in foreign exchange rates', it refers to the "date of transaction" when an entity either pays or receives consideration in advance for foreign currency denominated contracts. The date of transaction determines the exchange rate used to translate the foreign currency transactions. This interpretation did not have any impact in the Group financial statements.

b) Standards (new and amendments) and interpretations that have been published and are mandatory for the accounting periods beginning on or after January 1, 2019 and were already endorsed by the European Union:

(i) Standards:

• · IFRS 16 (new), 'Leases' (effective for annual periods beginning on or after 1 January 2019). This new standard replaces IAS 17 with a significant impact on the accounting by lessees who are now required to recognise a lease liability reflecting future lease payments and a "right-of-use asset" for all lease contracts, except for certain shortterm leases and for low-value assets. The definition of a lease contract also changed, being based on the "right to control the use of an identified asset". As of IFRS 16, the necessary analysis and framing was carried out with the actual situations applicable to the date and (i) considering the retrospective approach modified with the Asset equal to the Liability and (ii) considering the period, as a rule, the mandatory date and (iii) discount rates similar to those practiced in the market for other financing, it is concluded, that the qualitative impact, will not be significant in the Group's future financial statements.
• · IFRS 9 (amendment), 'Prepayment features with negative compensation' (effective for annual periods beginning on or after 1 January 2019). The amendment introduces the possibility to classify certain financial assets with negative compensation features at amortized cost, provided that specifilled, instead of being classified at fair value through profit or loss. It is not expected significant impact of future adoption of this amendment on the Group financial statements.

(ii) Interpretations:

· IFRIC 23 (new), 'Uncertainty over income tax treatment' (effective for annual periods beginning on or after 1 January 2019). This interpretation is still subject to endorsement by the European Union. This is an interpretation of IAS 12 - "Income tax' and refers to the measurements to be applied when there is uncertainty as to the acceptance of an income tax treatment by the tax authorities. In the position of the tax authority on a specific transaction, the entity shall make its best estimate and record the income tax assets or liabilities under IAS 12, and not under IAS 37 – 'Provisions, contingent liabilities and contingent assets', based on the expected value or the most probable value. The application of IFRIC 23 may be retrospective

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

modified. It is not expected significant impact of future adoption of this interpretation on the Group financial statements

c) Standards (new and amendments) that have been published and are mandatory for the accounting periods beginning on or after January 1, 2019, but are not yet endorsed by the European Union:

(i) Standards:

• · IAS 19 (amendment), Plan amendment, Curtailment or Settlement' (effective for annual periods beginning on or after 1 January 2019). This amendment is still subject to endorsement by the European Union. This amendment requires an entity to: i) use updated assumptions to determine the current service cost and net interest for the remaining period after amendment, reduction or settlement of the plan; and ii) recognize in the income statement as part of the cost of past services, or as a gain or loss in the settlement, any reduction in the excess of coverage, even if the excess of coverage had not been previously recognized, due to the impact of the asset celling. The impact on asset celling is recognised in Other Comprehensive Income, not being allowed to recycle it through profit for the year. It is not expected significant impact of future adoption of this amendment on the Group financial statements.
• · IAS 28 (amendment), 'Long-term interests in Associates and Joint Ventures' (effective for annual periods beginning on or after 1 January 2019). This amendment is still subject to endorsement by the European Union. The amendment clarifies that long-term investments in associates and joint ventures (components of an entity's investments in associates and joint ventures), that are not being measured through the equity method, are to be measured in accordance with IFRS 9. The long-term investments in associates and joint ventures are subject to the expected credit loss impairment model, prior to being added, for impairment test purposes, to the whole investment in associates and joint ventures, when impairment indicators exist. This amendment is not applicable at the financial statements of the Group.
• · IFRS 3 (amendment), 'Definition of a business (effective for annual periods beginning on or after 1 January 2020). This amendment is still subject to endorsement by the European Union. The amendment revises the definition of a business in order to account for business combinations. The new definition requires that an acquisition include an input, as well as a substantial process that jointly generate outputs. Outputs are now defined as goods and services rendered to customers, that generate income and other income, and exclude returns as lower costs and other economic benefits for shareholders. Optional 'concentration tests' for the assessment if one transaction is the acquisition of an asset or a business combination, are allowed. It is not expected significant impact of future adoption of this amendment on the Group financial statements.
• · IAS 1 and IAS 8 (amendment), 'Definition of material' (effective for annual periods beginning on or after 1 January 2020). This amendment is still subject to endorsement by the European Union. The amendment revises the concept of material. Includes clarifications as to obscured information, its effect being similar to the omission of information; and also, clarifications as to the term 'primary users of general statements', defined as 'existing or potential investors, lenders and other creditors' that rely on general purpose financial statements to

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

obtain a significant part of the information that they need. It is not expected significant impact of future adoption of this amendment on the Group financial statements.

• · Annual Improvements 2015 2017, (generally effective for annual periods beginning on or after 1 January 2019). These improvements are still subject to endorsement by the 2015-2017 annual improvements impact: IAS 23, IAS 12, IFRS 3 and IFRS 11. It is not expected significant impact of future adoption of these improvements on the Group financial statements.
• · Conceptual framework, 'Amendments to references in other IFRS' (effective for annual periods beginning on or after 1 January 2020). These amendments are still subject to endorsement by the European Union. As a result of the publication of the new Conceptual Framework, the IASB introduced changes to the text of various standards and interpretations, like: IFRS 2, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, SIC 32, in order to clarify the application of the new definitions of asset / liability and expense / income, in addition to some of the characteristics of financial information. These amendments are retrospective, except if impractical. It is not expected significant impact of future adoption of these amendments on the Group financial statements.
• · IFRS 17 (new), 'Insurance contracts' (effective for annual periods beginning on or after 1 January 2021). This standard is still subject to endorsement by the European Union. This new standard replaces IFRS 4 and applies to all entities issuing insurance contracts and investment contracts with discretionary participation characteristics. IFRS 17 is based on the current measurement of technical liabilities at each reporting date. The current measurement can be based on a complete "building block approach" or "premium allocation approach". The recognition of the technical margin is different depending on whether it is positive or negative. IFRS 17 is of retrospective application This standard It is not applicable on the Group financial statements.

2.1.1 Adoption of IFRS 9:

Impairment of financial assets

The application of IFRS 9 requires the determination of impairment losses based on the expected credit loss model, rather than an assessment made on the basis of the losses incurred in accordance with IAS 39.

The Group deals with three types of financial assets subject to the new credit impairment model set forth in IFRS 9: · Debt instruments recognised at amortised cost (Customers, Other third-party debts, Loans granted to related entities);

• · Assets from contracts with customers; and
• Debt instruments recognised at fair value through equity.

The Group has revised its methodology for calculating and recognising impairment losses for each of these classes of financial assets.

• a) Debt instruments at amortised cost
• a.1) Customers, Other third-party debts and Assets from contracts with customers

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

With respect to the balances under the "Customers," "Other third-party debts" and "Assets from contracts with customers" headings, the Group uses the simplified approach in IFRS 9, whereby expected impairment losses are recognised since the initial recognition of the balances and according to their maturity, considering a matrix of historical default rates for the maturity of the balances, adjusted via prospective estimates.

a.2) Loans granted to related entities

Loans granted to related entities were considered as having low risk, wherefore impairment losses were determined by means of an evaluation of the losses expected for the next 12 months, according to the general expected credit loss model.

b) Debt instruments at fair value through other comprehensive income

Debt instruments at fair value through equity were considered as having low risk, wherefore impairment losses were determined considering the losses expected for the next 12 months, according to the general expected credit loss model.

In accordance with the transitional provisions of IFRS 9, the Group chose to proceed with a retrospective application with adjustment to retained earnings, on the date of initial adoption (January 1, 2018); comparative values were not restated.

2.1.2 Adoption of IFRS 15 - "Revenue from contracts with customers"

In accordance with the transitional provisions of IFRS 15, the Group chose to proceed with a retrospective application with adjustment to retained earnings, on the date of initial adoption (January 1, 2018); comparative values were not restated.

The Group chose to apply the transitional provisions of IFRS 15 relating to contract modifications only to modifications occurred on or after January 1, 2018.

The adoption of IFRS 15 did not result in any changes to the Group's accounting policies, reclassifications or adjustments. The adoption of IFRS 9 did not result in any reclassifications or adjustments.

2.2 CONSOLIDATION PRINCIPLES

Consolidation principles used by the Group were as follows:

a) Investments in Group companies

Investments in companies in which the Group is exposed, or has voting rights, to variable returns as a result of their involvement in these companies and has the ability to affect those returns through the power of these companies (definition of control used by the Group), were included in the consolidated financial statements by the full consolidation method. Equity and net results corresponding to third participations in those companies are recorded separately in the consolidated statement of financial position and in the consolidated

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

income statement under the caption "Non-controlling interests". Fully consolidated companies are listed in Note ব

When losses attributable to minority shareholders exceed non-controlling interests in shareholder's equity, the Group absorbs the excess, in proportion to the percentage held.

For business combinations, earlier than 2010, it was adopted the purchase method to account for subsidiary's acquisitions. The acquisition cost corresponds to the fair value, determined at the acquisition date, of the assets given, equity instruments issued and liabilities incurred or assumed. The identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially recognized at fair value on the acquisition date, irrespective of the existence of non-controlling interests. The surplus in the cost of acquisition relating to the fair value of the Group of the assets identifiable acquired are registered as Goodwill. If the cost of acquisition is lower than the fair value of the acquired subsidiary, the difference is recognized directly in the Consolidated Income Statement.

For business combinations that have occurred on or after January 1, 2010, the Group has applied IFRS 3 Revised. According to the referred standard, the purchase method continues to be considered on business combinations, with the following significant changes:

• (i) transaction to transaction basis, measure non-controlling interests by the proportion of the acquired company's net assets or at the fair value of the assets and liabilities acquired;
• (ii)

It was also applied since January 1, 2010 the IAS 27 reviewed, which requires that all transactions with noncontrolling interests to be recognized on Equity, when there is no change on the control of the entity. Also, it isn't recognized goodwill or any profit or loss. When there is a loss of control on the entity, any remaining interest is remeasured at fair value, with a gain or loss being recognized on the consolidated income statement.

The results of Group companies acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or until the date of their disposal.

Adjustments to the financial statements of Toyota Caetano companies are performed, whenever necessary, in order to adapt accounting policies to those used by the Group. Intercompany balances and transactions, and dividends distributed between Group companies have been eliminated in the consolidation process.

Whenever the Group has, in substance, control over other entitles created for a specific purpose, even if no share capital interest is directly held in those entities, these are consolidation method.

<-- PDF CHUNK SEPARATOR -->

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

b) Conversion of financial statements of foreign entities

Assets and liabilities in the financial statements of foreign entities are translated to Euros using the exchange rates in force at the statement of financial position date, and gains and losses as well as cash flows are translated to Euros using the average exchange rates for the year. Exchange rate differences originated after January 1, 2004 are recorded in equity under the caption "Translation reserves". The accumulated exchange differences generated before January 1, 2004 (IFRS transition date) were written-off against the caption "Other reserves".

Whenever a foreign entity is disposed, the accumulated exchange rate differences are recorded in the financial statements as a profit or loss in the disposal.

2018
	Currency	Final Exchange Rate for 2018	Average Exchange Rate for 2018	Exchange Rate at the Date of Incorporation	Final Exchange rate for 2017
Caetano Auto CV, S.A.	CVE	0,009069	0,009069	0.009069	0,009069
Captions		Balance Sheet except	Income Statement	Share Capital	Retained

Shareholders

Exchange rates used in 2018 and 2017 in the translation into Euros of foreign subsidiaries were as follows:

2011
	Currency	Final Exchange Rate for 2017	Average Exchange Rate for 2017	Exchange Rate at the Date of Incorporation	Final Exchange rate for 2016
Caetano Auto CV, S.A.	CVE	0.009069	0.009069	0.009069	0.009069
Captions		Balance Sheet except	Income Statement	Share Capital	Retained
		Shareholders			Earnings

2.3 MAIN ACCOUNTING POLICIES

The main accounting policies used by Toyota Caetano Group in the consolidated financial statements were as follows:

a) Tangible Fixed Assets

Tangible fixed assets acquired until January 1, 2004 (IFRS transition date) are recorded at deemed cost, which corresponds to its acquisition cost or its revalue acquisition cost in accordance with generally accepted

Earnings

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

accounting principles in Portugal (and in the subsidiaries countries) until that date, net of accumulated depreciation and accumulated impairment losses.

Tangible fixed assets acquired after that date is recorded at acquisition cost, net of accumulated depreciation and accumulated impairment losses.

The impairment losses detected in the tangible fixed assets realization value are registered in the year in which they are estimated by counterpart of the item "Impairment losses" of the financial statements.

Depreciation is computed on straight-line basis as from the date the asset is first used according to the following expected useful lives:

	Years
- Buildings and other constructions	20 - 50
- Machinery and equipment	7 - 16
- Vehicles	4 - 5
- Tools and utensils	4 - 14
- Administrative equipment	3 - 14
- Other tangible assets	4 - 8

Expenses with maintenance and repair costs of tangible fixed assets are recorded as a cost in the year in which they occur. The repairs of significant amount that increase the estimated usage period of the assets are capitalized and depreciated according to the assets remaining useful life.

Tangible fixed assets in progress relate to tangible assets under construction/development are recorded at acquisition cost deducted of impairment losses. These assets are transferred to tangible fixed assets and depreciated as from the date in which they are prepared for use and in the necessary conditions to operate according with the management.

Gains or losses arising from the disposal or write-off of tangible fixed assets are computed as the difference between the selling price and the net book value at the date of disposal/write-off are recorded in the statement of profit and loss as "Other operating income" or "Other operating expenses".

b) Intangible assets

Intangible assets are recorded at acquisition cost, net of accumulated depreciation and accumulated impairment losses. Intangible assets are only recognized it is likely that future economic benefits will flow to the Group, are controlled by the Group and if their cost can be reliably measured.

Research costs and expenses with new technical knowledge are recorded as costs in the statement of profit and loss when incurred.

Development costs are capitalized as an intangible asset if the Group has proven technical feasibility and ability to finish the development and to sell/use such assets and it is likely that those assets will generate future

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

economic benefits. Development expenses which do not fulfil these requirements are recorded as an expense in the period in which they are incurred.

Internal expenses related to software maintenance and development are recorded as costs in the statement of profit and loss, except in situations in which these expenses are directly related to projects from which it is likely that future economic benefits will flow to the Group. In such circumstances, these expenses are capitalized as intangible assets.

Intangible assets are amortized on a straight-line basis over a period of three to five years.

The amortization charge for each period of intangible assets shall be recognized in profit or loss in item "Depreciations and amortizations".

c) Investment properties

Investment properties which relate to real estate assets held to obtain income through its lease or for capital gain purposes, and not for use in production, external supplies and services or for administrative purposes, are recorded at its acquisition cost, being the respective fair value disclosed in the Notes to the financial statements (Note 7).

Whenever these assets fair value is lower than the respective acquisition cost, an impairment loss is recorded against the caption "Impairment losses" in the statement of profit and loss. As of the moment in which the recorded accumulated impairment losses no longer exist, they are immediately reversed against the caption "Impairment losses" in the statement of profit and loss until the limit of the amount that would have been determined, net of amortizations or depreciations, if no impairment losses would have ever been recognized in previous years.

Investment properties disclosed fair value is determined on an annual basis by an independent appraiser (Market, Cost and Profit Method models).

d) Lease contracts

Lease contracts are classified as (i) financial lease contracts, if all or a substantial part of the risks and benefits related to possession are transferred and as (ii) operational lease contracts if all or a substantial part of the risks and benefits related to possession are not transferred.

Classification as financial lease contracts or as operational lease contracts depends on the substance of the transaction and not on the form of the contract.

Tangible fixed assets acquired under financial lease contracts, as well as the corresponding liabilities are recorded according to the financial method and, consequently, the cost of the fixed asset is recorded in tangible fixed assets captions and the corresponding responsibility as leasing captions. Lease down payments are

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

constituted by interest expenses and by the amortization of capital in accordance with the contractual financial plan, with interests recognized as expenses in the statement of profit or loss for the year to which they relate and with the depreciation of the tangible fixed assets according to their estimated useful liyes, according to Note 2.3.a), except when the lease term is shorter than the estimated useful lives.

For lease contracts considered as operational, the rents paid are recognized as an expense in the statement of profit or loss over the rental period (Note 34).

Inventories e)

Goods, raw, subsidiary and consumable materials are recognized at the initial moment of their acquisition at cost. Subsequently, these are valued at average acquisition cost, which is lower than market value.

Finished and intermediate goods as well as work in progress are stated at production cost, which is lower than market value. Production costs include the cost with raw materials, direct labor, production overheads and external services.

Accumulated impairment losses to reduce inventories value reflect the difference between their acquisition cost and net realizable or market value, which corresponds to the price shown on market statistics.

f) Government or Other public entities subsidies

Government subsidies are recognized at the respective fair value when there is a solid guarantee that they will be received and that the Group will be able to accomplish the conditions required to its concession.

Non-Repayable Subsidies

The subsidies related to costs incurred are registered as a gain if there is a reasonable guaranty that they will be received, if the Group has already incurred in the subsidiary costs and if they fulfill the conditions for their concession.

g) Impairment of assets

- Non current assets except Goodwill

Assets are assessed for impairment at each statement of financial position date whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Whenever the carrying amount of an asset exceeds its recoverable amount (defined as the net sale price and the use value, or as the net sale price for sale), an impairment loss is recognized in the statement of profit and loss under the caption "Impairment losses". The net selling price is the amount that would be obtained from the sale of an asset in a transaction between independent entities, less the cost of the disposal. The value in use is the present value of estimated future cash flows expected to arise from the

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

continued use of an asset and its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if not possible, for the cash-generating unit to which the asset belongs.

The reversal of impairment losses recognized in previous years is recorded when it is concluded that the impairment losses recognized for the asset no longer exist or have decreased. This analysis is performed whenever there is an indication that the impairment losses previously recognized have been reversed. The reversal is recorded in the statement of profit or loss in the caption "Impairment losses". However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation and amortization) had no impairment losses been recognized for that asset in previous years.

• Goodwill

The value of Goodwill is not amortized, being tested for impairment purposes on an annual basis. The recoverable amount is determined as being the present value of estimated future cash flows that are expected to be generated by the continuous use of the asset. Impairment losses of Goodwill are recognized in the income statement in the caption "Impairment Losses".

Goodwill impairment losses cannot be reversed.

Financial expenses h)

Loan's related financial costs (interests, premiums, ancillary costs and lease interests) are recognized as financial costs in income statement of the period in which they are incurred, in accrrdance with the accrual principle and the effective interest rate method, except if those costs are directly related to the acquisition, construction or production of fixed assets. In this case, the referred costs are capitalized, being part of the asset cost. The capitalization of these costs beginning of the preparation of the construction or asset development activities and it is interrupted when the asset is ready to be used or when the project is suspended. Any financial income generated by loans that are directly related with a specific investment, are deducted to financial expenses elected for capitalization purposes.

Provisions i)

Provisions are recognized when and only when the Group has a present obligation (legal or constructive) resulting from a past event, whenever it is probable that, for the resolution of that obligation, there will be an outflow of resources and the amount of the obligation may be reasonably estimated. Provisions are reviewed at the date of each statement of financial position and are adjusted to reflect the best estimate of their fair value at that date (Note 24).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Financial assets i)

Accounting policy adopted as of January 1, 2018

Recognition

Purchases and sales of investments in financial assets are recorded on the date of the transaction, i.e., the date on which the Group undertakes to buy or sell the asset.

Classification

The classification of financial assets depends on the business model followed by the Group to manage its financial assets (receipt of cash flows or appropriation of fair value changes) and the contractual terms of the cash flows receivable.

Changes to the classification of financial assets can only be made when the business model is changed, except in the case of financial assets at fair value through other comprehensive income, which are equity instruments and, therefore, can never be reclassified to another category.

Financial assets may be classified according to the following measurement categories:

(i) Financial assets at amortised cost: includes financial assets that correspond only to the payment of nominal value and interest, and the business model followed by management is the receipt of contractual cash flows;

(ii) Financial assets at fair value through other comprehensive income: this category may include financial assets that qualify as debt instruments (contractual obligation to deliver cash flows) or equity instruments (residual interest in an entity);

a. In the case of debt instruments, this category includes financial assets that correspond only to the payment of nominal value and interest, when the business model followed by management is the receipt of contractual cash flows, either occasionally or a result of their sale;

b. In the case of equity instruments, this category includes the percentage of interest held in entities over which the Group does not exercise control or significant influence, and which the Group irrevocably chose, on the date of initial recognition, to designate at fair value through other comprehensive income;

(iii) Financial assets at fair value through profit or loss: includes assets that do not meet the criteria for classification as financial assets at amortised cost or at fair value through other comprehensive income, whether they refer to debt instruments or equity instruments that were not designated at fair value through other comprehensive income.

The classification of the Group's financial assets by category as of December 31, 2018, is shown in Note 33.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Measurement

The Group initially measures financial assets at fair value, plus transaction costs directly attributable to the acquisition of the financial asset, for financial assets that are not measured at fair value through profit or loss. Transaction costs of financial assets at fair value through profit or loss are recorded in the income statement when incurred.

Financial assets at amortised cost are subsequently measured in accordance with the effective interest rate method, minus impairment losses. Interest income on these financial assets is included in "Interest earned on assets at amortised cost" in financial income.

Financial assets at fair value through other comprehensive income, which are debt instruments, are subsequently measured at fair value changes recognised in other comprehensive income, except for variations related to the recognition of impairment, interest income and gains({losses) due to foreign exchange differences, which are recognised in the income statement for the year. Financial assets at fair value through other comprehensive income are subject to impairment.

Financial assets at fair value through other comprehensive income which are equity instruments are measured at fair value on the date of initial registration and subsequently, and changes in fair value are recorded directly in other comprehensive income, in equity, and no future reclassifications will occur, even after derecognition of the investment. Dividends obtained from these investments are recognised as gains, in the income statement for the year, on the date they are attributed.

Impairment losses

The Group prospectively assesses the expected credit losses associated with the financial assets, which are debt instruments, classified at amortised cost and at fair value through other comprehensive income.

The applied impairment methodology considers the credit risk profile of the debtors, and different approaches are used depending on the nature of the debtors.

With respect to the accounts receivable under the "Customers" and "Other third-party debts" headings and Assets from contracts with customers, the Group uses the simplified approach allowed by IFRS 9, according to which expected credit losses are recognised since the initial recognition of the accounts receivable and throughout their maturity, considering a matrix of historical default for the accounts receivable, adjusted via prospective estimates.

With respect to accounts receivable from related entities, which are not considered part of the financial investment of these entities, credit impairment is assessed according to the following criteria: i) if the account receivable is immediately payable ("on demand"); ii) if the account receivable has an insignificant risk; or (iii) if it has a maturity of less than 12 months.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

In cases where the amount receivable is immediately payable and the related entity is able to pay it, the probability of default is close to 0% and, therefore, the impairment is considered equal to zero. In cases where the account receivable is not immediately payable, the related entity's credit risk is assessed and if it is considered "low" or if the maturity is less than 12 months, then the Group only evaluates the probability of a default occurring for the cash flows that will mature in the next 12 months.

To all other situations and types of accounts receivable, the Group uses the general approach of the impairment model, evaluating on each reporting date whether there has been a significant increase in credit risk since the date on which the asset was initially recognised. If there is no increase in credit risk, the Group calculates an impairment corresponding to the amount equivalent to expected losses within a period of 12 months. If there is an increase in credit risk, the Group calculates an impairment corresponding to the amount equivalent to expected losses for all contractual flows until the maturity of the asset.

Instruments at fair value through capital

These are all the remaining investments that are not classified as held to maturity or measured at fair value through profit and loss. This category is included in non-current assets, except if the Board of Directors has the intention of alienate the investment within a period inferior to 12 months stating from the statement of financial position date.

At December 31, 2018 Toyota Caetano Group held shares of Cimóvel - Real Estate Investment Fund (Note 9),

Derecognition of financial assets

The Group derecognises financial assets when, and only when, contractual rights to cash flows have expired or have been transferred and the Entity has substantially transferred all the risks and benefits pertaining to the ownership of the asset.

Accounting policies adopted until December 31, 2017

Investments

Investments held by the Group are classified as follows: 'Investments measured at fair value through profit and loss', 'Investments held to maturity', 'Instruments at fair value through capital' and 'Investments held for sale, loans and accounts receivable'. The classification depends on the subjacent intention of the investment acquisition.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Available for sale financial assets

These are all the remaining investments that are not classified as held to maturity or measured at fair value through profit and loss. This category is included in non-current assets, except if the Board of Directors has the intention of alienate the investment within a period inferior to 12 months stating from the statement of financial position date.

At December 31, 2017 and 2016, Toyota Caetano Group held shares of Cimóvel - Real Estate Investment Fund (Note 9).

Fair Value of Financial Investments

To determine the fair value of a financial asset or liability, if such a market price is applied (Level 1). A market is regarded as active if quoted prices are readly and reqularly available from an exchange, broker or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. Otherwise, which is the case of some financial assets and liabilities, valuation techniques that are generally accepted in the market are used based on market assumptions (e.g.: discounted cash flow models that incorporate interest rate curves and market volatility, which is the case of derivative financial instruments) - Level 2. On the other cases, valuation techniques are used, not based on observable market data — Level 3.

Investments are all initially recognized at fair value, including transaction costs, except for investments recognized at fair value through profit or loss. Investments are initially recognized at fair value, and the respective transaction costs are recognized directly in the income statement.

"Instruments at fair value through capital" is kept at fair value at the balance sheet date, without deducting any transaction cost that could occur until the time of disposal.

Instruments at fair value through capital representative of share capital from unquoted companies are recognized at the acquisition cost, taking into account the existence or not of impairment losses. It is conviction of the Board of Directors that the fair value of these investments does not differ significantly from their acquisition cost.

Gains and losses arising from a change in the fair value of instruments at fair value through capital are recorded under equity caption "Fair value reserves" until the investment is sold or disposed, or until it is determined to be impaired. At that moment, the accumulated gains or losses previously recognized in equity are transferred to profit and loss statement for the period.

All purchases and sales of investments are recorded on their trade date, which is on the date the Group assumes all risks and obligations related to the purchase or sale of the asset.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The fair value of the instruments at fair value through capital is based on the current market is not net (non-listed investments), the Group records the acquisition cost, having in consideration the existence or not of impairment losses. The Board of Directors believes that the fair value of these investments is not very different from the acquisition cost. The fair value of the listed investments is calculated based on the stock market closed value at statement of financial position date.

The Group makes evaluations if it considers that at the statement of financial position date exists clear evidence that the financial asset might be in impairment. In case of stock instruments at fair value through capital, have a significant drop or extended of its fair value inferior to its cost, it indicates that an impairment situation is occurring. If there is any evidence of impairments at fair value through capital", the accumulated losses – calculated by the difference between the acquisition cost and the fair value deducted from any impairment loss previously recognized in the statement of profit and loss - are retrieved from the equity and recognized in the statement of profit and loss.

The investments are derecognized if the right to receive financial flows has expired or was transferred, and consequently, all associated risks and benefits have been transferred.

Cash and cash equivalents

The amounts included under "Cash and cash equivalents" correspond to cash values, bank deposits, time deposits and other cash investments, which mature less than three months and can be immediately mobilized with insignificant risk of change in value.

Accounts receivables and Other debtors

These headings mainly include customer balances resulting from services rendered as part of the Group's activity and other balances related to operating activities. Balances are classified as current assets when they are estimated to be collected within a 12-month period. Balances are classified as non-current when they are estimated to be collected more than 12 months after the reporting date.

Accounting policies adopted as of January 1, 2018

The "Customers" and "Other third-party debts" headings are initially recognised at fair value and are subsequently measured at amortized cost, minus impairments. Impairment losses in Customers and Other third-party debts are recorded in accordance with the principles described in the policy in Note 2. The identified impairment losses are recorded in the income statement losses and are subsequently reversed by profit or loss.

Accounting policies adopted until December 31, 2017

Financial assets presented under the "Customers" and "Other third-party debts" headings are measured, when initially recognised, at fair value, and subsequently at amortised cost, in accordance with the effective interest

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

rate method, minus impairment losses. When there is evidence that they are impaired, the corresponding adjustment is recorded in profit or loss. The recognised adjustment is measured by the difference between the amount at which the accounts receivable are recognised and the present value of discounted cash flows at the effective interest rate determined upon initial recognition.

k) Financial liabilities

Accounting policy adopted as of January 1, 2018

Financial liabilities are classified in two categories:

• i) Financial liabilities at fair value through profit or loss; and
• ii) Financial liabilities at amortised cost.

The "Financial liabilities at amortised cost" category includes liabilities recorded under "Loans obtained" (Note 18), "Suppliers" (Note 19) and "Other liabilities to third parties" (Note 20). These liabilities are initially recognised at fair value, net of transaction costs, and subsequently measured at amortised cost according to the effective interest rate method

Financial liabilities are derecognised when the underlying obligations are extinguished by payment, cancelled, or expire.

As of December 31, 2018, the Group has only recognised liabilities dassified as "Financial liabilities at amortised cost."

Financial liabilities are derecognised when the underlying obligations are extinguished by payment, cancelled, or expire.

l oans obtained

Loans obtained are initially recognised at fair value, net of any transaction costs incurred. Loans are subsequently measured at amortised cost and the difference between the nominal value and the initial fair value recognised in the income statement and in the other comprehensive income statement throughout the term of the loan using the effective interest rate method.

Loans obtained are classified under current liabilities, unless the Group has an unconditional right to defer the payment of the liability for at least 12 months after the date of the financial report, in which case they are classified as non-current liabilities.

Suppliers

These headings usually include balances of suppliers of goods and services that the Group acquired in the normal course of its business. The items included in these will be classified as current liabilities if the payment is due within 12 months or less; otherwise, the "Suppliers" accounts will be classified as non-current liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

These financial liabilities are initially recognised at fair value. After their initial recognition, the liabilities shown under the "Suppliers" heading are measured at amortised cost, using the effective interest rate method.

Accounting policy adopted until December 31, 2017

Financial liabilities are classified in two categories:

i) Financial liabilities at fair value through profit or loss; and ii) Other financial liabilities.

The "Other financial liabilities" category includes liabilities recorded under the "Loans obtained" (Note 18), "Suppliers" (Note 19) and "Other liabilities to third parties" (Note 20) headings. These liabilities are initially recognised at fair value and subsequently measured at amortised cost according to the effective interest rate method.

Financial liabilities are derecognised when the underlying obligations are extinguished by payment, cancelled, or expire.

As of December 31, 2017, the Group has only recognised liabilities classified as "Other financial liabilities."

Loans

Loans are recorded as liabilities at their nominal value net of up-front expenses which are directly related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the statement of profit and loss on an accrual basis.

Accounts payable and Other creditors

Accounts payable and Other creditors not bearing interests are measured at cost, less impairment losses so that they reflect the respective net realizable value. These amounts are not discounted because its effect in the financial actualization is not considered relevant.

I) Pension complements (Defined benefit plans and Defined contributions plan)

In order to estimate its liabilities for the mentioned responsibilities, the Group obtains annually an actuarial calculation of the liabilities for past services in accordance with the "Current Unit Credit Method".

Recorded liabilities as of the statement of financial position date relate to the present value of future benefits adjusted for actuarial profits or losses and/or for liabilities for past services non-recognized, net of the fair value of net assets within the pension fund (Note 23).

The Group recognized remeasurement in "Other reserves", not being recycled for results.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

m) Contingent assets and liabilities

Contingent liabilities are defined by the Group as (i) possible obligations from past events and which existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under Group's control or (ii) present obligations from past events not recognized because it is not expected that an output of resources that incorporate economic benefits will be necessary to settle the obligation or its amot be reliably measured.

Contingent liabilities are not recorded in the consolidated financial statements, being disclosed in the respective Notes, unless the probability of a cash outflow is remote. In these situations, no disclosure is made.

Contingent assets are possible assets that arise from past events and whose existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under the Group's control.

Contingent assets are not recorded in the consolidated financial statements but only disclosed when it is likely the existence of future economic benefits.

n) Income taxes

Taxes on income for the year are calculated based on the Special Taxation of Groups of Companies ("RETGS"), which includes companies of Toyota Caetano Group based in Portugal: Toyota Caetano Portugal, Caetano Renting, Saltano and Caetano Auto.

The only subsidiary with headquarters in a foreign country (Caetano Auto Cabo Verde) is taxed on an individual basis and in accordance with the applicable legislation.

Deferred taxes are calculated using the balance sheet liability method, reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are not recognized when temporary differences arise from goodwill or from initial recognition of assets and liabilities other than in a business combination. Deferred tax assets and liabilities are calculated and annually reviewed using the tax rates in place or announced and thereby expected to apply at the time the temporary differences are expected to reverse.

Deferred tax assets are recognized only when it is probable that sufficient taxable profits will be available against which the deferred tax assets can be used, or when taxable temporary differences are recognized and expected to reverse in the same period. At each balance sheet date, a review is made of the deferred tax assets recognized, which are reduced whenever their future use is no longer likely.

Deferred tax assets and liabilities are recorded in the income statement, except if they relate to items directly recorded in equity, situations in which the corresponding deferred tax is also recorded in equity captions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

o) Accrual basis

Revenues and expenses are recorded according to the accrual basis, by which they are recognized in the period to which they relate independently of when the amounts are received or paid. Differences between the amounts received and paid and corresponding income and expenses are recorded in the captions accruals and deferrals included in "Other current assets" and "Other current liabilities".

Income and expenses for which the actual amount is yet unknown are recorded based on the best estimate of the Board of Directors of the Group companies.

p) Revenue from contracts with customers

Accounting policy adopted as of January 1, 2018

Revenue corresponds to the fair value of the amount receivable from transactions with customers in the normal course of business. Revenue is recorded net of any taxes, trade discounts, and financial rebates.

In determining the value of revenue, the Group evaluates the performance obligations undertaken towards customers in each transaction, the price of the transaction to be affected by each performance obligation that is identified, and the existence of variable price conditions that may lead to future adjustments to the value of the recorded revenue, for which the Group makes its best estimate.

Revenue is recorded in the income statement when the control over the product or service is transferred to the customer, i.e., at the moment when the customer becomes able to manage the use of the product or service and to obtain all the remaining economic benefits associated with it.

The Group considers that, given the nature of the product or service that is associated with the performance obligations undertaken, the transfer of control occurs mostly on a specific date, but there may be transactions in which the transfer of control occurs continuously over the contractual period that has been previously established.

Accounting policy adopted until December 31, 2017

Revenue is recognized net of taxes and commercial discounts, by the fair value of the amount received or to be received, knowing that:

• The revenue from sales is recognized in the income statement when the significant part of risks and benefits related with the possession of assets is transferred to the acquirer, it is probable the future economic benefits will flow to the entity and these benefits can be measured reliably.
• The revenue from services rendered is recognized according to the stage of completion of the transaction at the balance sheet date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Revenue of the Toyota Caetano Portugal Group is comprised of the revenue arising from the activities mentioned in Note 1

q) Statement of financial position classification

All assets and liabilities, including assed and liabilities deferred tax, accomplishable or receivable in more than one year after the statement of financial position date are classified as "Non current assets or liabilities".

r) Balances and transactions expressed in foreign currency

Assets and liabilities stated in foreign currency were translated into Euros using applicable exchange rates as of statement of financial position date. Exchange differences, favorable and unfavorable, resulting from differences between applicable exchange rates as of the transactions and those applicable as of the date of cash collection, payments or as of statement of financial position date, were recorded as gains and losses in the consolidated income statement.

s) Earnings per share policy

Basic·

The basic earnings per share is calculated by dividing the taxable income of the weighted average number of common shares issued during the period, excluding the common shares acquired by the company and held as treasury shares.

Diluted:

Diluted earnings per share are calculated by dividing the profit attributable to shareholders, adjusted for the dividends of convertible preferred shares, convertible debt interest and gains and expenses resulting from the conversion, by the weighted average number of common shares issued during the period plus the average number of shares common shares issued in converting potential dilutive common shares.

t) Segment information

In each year the Group identifies the most adequate business segments.

In accordance with IFRS 8, an operating segment is a Group component:

• i) that engages in business activities from which it may earn revenues and incur expenses;
• ii) whose operating results are reviewed regularly by the entity's chief operating decision maker in order to make decisions about resources to be allocated to the segment and assess its performance; and
• iii) for which discrete financial information is available.

Information related to the identified operating segments is included in Note 27.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

In that note, information is also given by geography and subsegments. For the segment of motor vehicles were added the subsegments, industry, trade, services and rental. For the industrial equipment segment, the machinery, services and rental sub-segment was added

u) Subsequent events

Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in the financial statements. Events after the balance sheet date that are non-adjusting events, are disclosed in the notes when material.

2.4 JUDGMENTS AND ESTIMATES

During the preparation of the consolidated financial statements, the Board of Directors of the Group based itself in the best knowledge and in the experience of past and/or present events considering some assumptions relating to future events

Most significant accounting estimates included in attached financial statements as of December 31, 2018 and 2017 include:

• a) Useful lives of tangible and intangible assets;
• b) Registration of adjustments to the asset's values (accounts receivable and inventories) and provisions;
• c) Impairment tests performed to goodwill and sensibility tests (Note 8);
• d) Discharge of the fair value of derivative financial instruments; and
• e) Clearance of responsibilities with Pension complements (Note 23).

The underlying estimations and assumptions were determined based in the best knowledge existing at the date of approval of the financial statements of the events and transactions being carry out as in the experience of past and/or present events. Nevertheless, some situations may occur in subsequent periods which, not being predicted at the date of approval of the financial statements, were not consider in these estimations. The changes in the estimations that occur after the financial statements shall be corrected in a foresight way. Due to this fact and to the uncertainty degree associated, the real results of the transactions may differ from the corresponding estimations. Changes to these estimates, which occur after publication of these consolidated financial statements, will be corrected in a prospective way, in accordance with IAS 8.

The main significant judgments and estimates relating to future events included in the financial statements are described in the related notes to the financial statements.

The Group conducts sensitivity tests, in order to measure the risk inherent in these judgments and estimates.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

2.5 FINANCIAL RISK MANAGEMENT POLICIES

The Group's activity is exposed to a variety of financial risks, such as market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. These risks arise from the unpredictability of financial markets that affect the capacity of projected cash flows and profits subject to a perspective of long term ongoing. Management seeks to minimize potential adverse effects that derive from that uncertainty in its financial performance.

The financial risks management is controlled by Toyota Caetano financial department, according to the policies established by the Group Board of Directors has established the main principles of global risk management as well as specific policies for some areas, as interest rate risk and credit risk.

i) Foreign currency risk

The Group operates internationally and has a subsidiary operating in Cape Verde. The group selects a functional currency for each subsidiary (Cape Verde Escudo, for the subsidiary Caetano Auto Cabo Verde, S.A.), corresponding to the currency of the economic environment and the ones that better represents its cash flows composition. Foreign currency risk arises mainly from future commercial transactions, as a result of purchases and sales of products and services in a different currency than the functional currency used by each Company.

The Group foreign currency risk management hedge policies are decided casuistically, considering the foreign currency and country specific circumstances (as of December 31 ,2018 and 2017, this situation is not applicable to any of the Group Subsidiaries).

Foreign currency risk related to the foreign subsidiaries financial statements translation, also named translation risk, presents the impact on net equity of the Holding Company, due to the translation of foreign subsidiaries financial statements.

As mentioned in Note 2.2 b), assets and liabilities of foreign subsidiaries are translated into Euros using the exchange rates at statement of financial position date, and gains and losses of these entities are translated into Euros using the average exchange rate of the year. Resulting exchange differences are recorded in equity caption "Translation reserves".

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The Group's assets and liabilities amounts (expressed in a different currency from Euro can be summarized as follows:

	Assets		Liabilities
	2018	2017	2018	2017
Cape Verde Escudo (CVE) Great Britain pounds (GBP) Japanese Yen (JPY)	6.950.754	7.581.776 1 -	2.421.144 38.096 666.606	3.275.834 31 617.636

The sensitivity of the Group to foreign exchange rate changes can be summarized as follows:

	2018		2017
Variation	Profit or Loss	Equity	Profit or Loss	Equity
		-		215.297
5%	(33.330)	1	(30.882)
	5% 5%	11.183 (1.906)	226.480	17.793

ii) Price risk

The group is exposed to the changing in raw material's prices used on production processes, namely auto parts. However, considering that the acquisition of those raw materials is not in accordance with a price quoted on an exchange market or formed on a volatile market, the price risk is not considered as being significant.

During 2018 and 2017, the Group has been exposed to the risk of variation of instruments at fair value through capital prices. At December 31, 2018 and 2017, the referred caption is composed only by shares of the closed property investment fund Cimóvel – Fundo de Investimento Imobiliário Fechado (Real Estate Investment Fund). Due to the fact that the referred asset is classified as an instrument at fair value through capital, the effect of change in its fair value is recognized in accordance with the principles described on the note 2.3. j).

The Group's sensitivity to price variations in instruments at fair value through capital can be summarized as follows (increases/(decreases)):

		2018		2017
	Variation	Profit or Loss	Equity	Profit or Loss	Equity
CIMOVEL FUND CIMOVEL FUND	10% -10%		356.668 (356.668)		366.576 (366.576)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

iii) Interest rate risk

Toyota Caetano debt is indexed to variable interest rates, exposing the total cost of debt to a high risk of volatility. The impact of this volatility on the Group's results and shareholders' equity mitigated due to the effect of the following factors: (i) possible correlation between the market interest rate levels and economic growth, having a positive effect on the other lines of the Group's consolidated results (particularly operational), thus partially offsetting the increased financial costs ("natural hedge") and (ii) the availability of consolidated liquidity or cash, also remunerated at variable rates.

Toyota Caetano Board of Directors approves the terms and conditions of the funding, analyzing the debt structure, the inherent risks and the different options available in the market, particularly considering the type of interest rates (fixed / variable) and, permanently monitoring conditions and alternatives existing in the market, and decides upon the contracting of occasional interest rate hedging derivative financial instruments.

Interest rate risk sensitivity analysis

The sensitivity analyses presented below was based on exposure to interest rates for financial instruments at the statement of financial position date. For floating rate liabilities, the analysis is prepared assuming the following:

• (i) Interest rate is superior in 0,5 p.p. than the supported interest rate.
• (ii) Calculation was made using the Group's debt at the end of the year.
• (iii) Spreads maintenance throughout the year.

The sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some assumptions may be correlated.

			2018		2017
		Variation	Net Income	Equity	Net Income	Equity
Mutual Loans		0,5 p.p.			35.000
Guaranteed account		0,5 p.p.	50.000	-	25.000
Bank Credits		0,5 p.p.	4.618	-	2.649
Commercial Paper		0,5 p.p.	97.000	-	172.000
Long-term Bank Loan		0,5 p.p.	50.000	-	50.000
Bond I oan		0,5 p.p.	62.500	-
	Total		264 118	-	284.649
Mutual Loans		(0,5 p.p.)			(35.000)
Guaranteed account		(0,5 p.p.)	(50.000)	-	(25.000)
Bank Credits		(0,5 p.p.)	(4.618)	-	(2.649)
Commercial Paper		(0,5 p.p.)	(97.000)	-	(172.000)
Long-term Bank Loan		(0,5 p.p.)	(50.000)	-	(50.000)
Bond Loan		(0,5 p.p.)	(62.500)
	Total		(264 118)		(284.649)

Group's sensitivity to changes in interest rates is summarized as follows (increases)):

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

iv) Liquidity risk

Liquidity risk is defined as the risk that the Group could not be able to settle or meet its obligations on time or at a reasonable price.

The existence of liquidity in the Group requires the definition of some parameters for the efficient and secure management of liquidity, enabling maximization of the return obtained and minimization of the opportunity costs relating to the liquidity.

Toyota Caetano Group liquidity risk management has a threefold objective:

(i) Liquidity, which is to ensure permanent access in the most efficient way to sufficient funds to cover current payments on the respective maturity dates, as well as any unexpected requests for funds;

(ii) Safety, which is the minimization of the probability of default in the repayment of any application in funds; and

(iii) Financial Efficiency, which is ensuring that the Companies maximize the value / minimize the opportunity cost of holding excess liquidity in the short-term.

All excess liquidity is applied in short-term debt amortization, according to economic and financial reasonableness criteria.

In the following table, it is presented the maturity of each financial liability, with non-discounted values, taking into consideration the most pessimistic scenario (the shortest period on which the liability becomes exigible):

2018	Less than year	Between 1 and 2 years	Between 2 and 4 vears	More than 4 Years	Total
Loans	52.538.913	6.028.237	17.553.607	14.883.298	91.004.055
Accounts Payable	39.907.558				39.907.558
Other Creditors	14.783.849				14.783.849
	107.230.320	6.028.237	17.553.607	14.883.298	145.695.462

2017	Less than 1 vear	Between 1 and 2 years	Between 2 and 4 years	More than 4 Years	Total
Loans	53.024.793	5.773.821	8.111.293	13.028.887	79.938.794
Accounts Payable	40.256.759				40.256.759
Other Creditors	13.207.611				13.207.611
	106.489.163	5,773,821	8.111.293	13.028.887	133.403.164

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

At December 31, 2018 and 2017, the Group presents a net debt of 73.928.900 Euros and 62.671.224 Euros, respectively, divided between current and non current loans (Note 18) and cash equivalents (Note 15), agreed with the different financial institutions.

Capital Risk v)

The main objective of the Board is to assure the continuity of the operations, providing an adequate remuneration to shareholders and the correspondent benefits to the stakeholders of the Group. For the prosecution of this objective it is fundamental that a careful management of funds invested in the business is assured, trying to keep an optimal capital structure, in order to achieve the desired reduction of the cost of capital. With the purpose of maintaining an adequate capital structure, the Board can propose to the shareholders the measures considered necessary.

The Group tries to maintain a level of equity considered adequate to the business characteristics, in order to assure continuity and expansion of the business. The capital structure balance is monitored through the financial leverage ratio (defined as net debt/ (net debt + equity)).

	2018	2017
Debt	91.004.055	79.938.794
Cash and cash equivalents	(17.075.155)	(17.267.570)
Net Debt	73.928.900	62.671.224
Equity	137.873.129	132.099.652
Leverage ratio	34.90%	32,18%

The gearing remains between acceptable levels, as established by management.

vi) Credit risk

The Group credit risk results mainly from:

i) the risk of recovery of monetary assets entrusted to third parties, and ii) the risk of recovery of loans granted to entities outside the group. Credit risk is assessed at the initial moment and over to monitor its evolution.

A significant portion of the amounts receivable from customers is dispersed among a large number of entities, a factor that contributes toward reducing the credit concentration risk. As a general rule, the Group customers are not assigned a credit rating.

Credit risk is monitored by the Group financial department, under the Board of Directors, based on: i) the rating assigned by the credit insurance company, with which the Group has negoitated a credit insurance agreement; (ii) the debtors' corporate nature; iii) the type of transactions originating the accounts receivable; iv) the experience of past transactions; and (v) the credit limits established for each customer.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The Group considers the probability of default upon the initial recognition of the asset and, according to the occurrence of significant increases in credit risk continuously in each reporting period. In order to assess whether there has been a significant increase in credit risk, the Group compares the risk of default occurring by reference to the reporting date, with the risk of default assessed by reference to the date of initial recognition. Adequate and duly supported prospective information is considered. The following indicators are taken into account:

• Internal credit risk;
• · External credit risk (where available);
• · Current or expected adverse changes in the debtor's operating results;
• · Significant increases in the credit risk of the debtor's other financial instruments; · Significant changes in the value of collateral for liabilities, or in the quality of third-party guarantees;

• Significant changes in the debtor's expected performance and behaviour, including changes in the debtor's payment conditions at the level of the Group to which it belongs, as well as changes at the level of its operating results:

Macroeconomic information (such as market interest rates or growth rates) is incorporated into the domestic credit model.

Irrespective of the above analysis, a significant increase in credit risk is presumed to exist if a default by more than 30 days from the contractual payment date.

Default is deemed to exist when the counterparty fails to make contractual payments within 90 days of the invoice due date. When financial assets are derecognised, the Group continues to take the necessary measures to recover the amounts owed. In cases of successful recovered amounts are recognised in the income statement for the year.

Financial assets are derecognised when there is no real expectation of recovery. The Group classifies a loan or account receivable to be derecognised when the debtor fails to make contractual payments within 30 days.

Impairment of financial assets

a) Customers and Other third-party debts

The Group uses the simplified approach to calculate and record the expected credit losses required by IFRS 9, which allows using estimated impairment losses for all "Customer" and "Other third-party debt" balances. In order to measure expected credit losses, "Customers" and "Other third-party debts" were aggregated based on the shared credit risk characteristics, as well as on the days of delay. Impairment losses on December 31, 2018 are determined as follows; the expected credit losses include information from prospective estimates. Seniority of customer balances in Note 11.

Until December 31, 2017, the impairment in "Customers" and "Other third-party debts" balances were evaluated according to the incurred credit loss method.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

b) Loans granted to related entities

The balances in "Loans granted to related parties" are considered to have a low credit risk and, therefore, impairment in credit losses recognised during the period are limited to expected credit losses estimated for 12 months. These financial assets are considered to have a "low credit risk" when they have a low uncollectibility risk and the debtor has a high capacity to meet its contractual cash flow liabilities in the short term.

Regarding independent dealership customers, the Group requires "on first demand", whose amounts, as of December 31, 2018 were of, approximately, 9.114.110 Euros (8.020.667 as of December 31, 2017), and whenever these amounts are exceeded, these customers' supplies are suspended.

The adjustments for accounts receivable are calculated considering (a) the client risk profile, (b) the average time of receipt and (c) the client financial situation. The movements of these adjustments for the years ending at December 31, 2018 and 2017 are stated in Note 24.

At December 31, 2018 and 2017, the Group considers that there is no need for additional impairment losses, besides the amounts registered on those dates and stated, briefly, in Note 24.

The amount related to the customers and other debtors in financial statements, which is net of impairment losses, represents the maximum exposure of the Group to credit risk.

Deposits Long Term Rating	Rating Agency	Value
A1	Moody's	10.320
A2	Moody's	50.302
A3	Moody's	600 772
АаЗ	Moody's	8.684
B3	Moody's	406-506
Ba1	Moody's	1.976.845
Ba3	Moody's	6.856.596
Baa1	Moody's	632 651
Baa2	Moody's	4.324.673
Caa1	Moody's	846.168
Others without rating assigned	Others without rating assigned	1.233.879
Total		16.947.398

The following table presents, on December 31, 2018, the credit quality of bank deposits:

The ratings presented correspond to ratings assigned by the Rating Agency Moody's.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISSTATEMENTS

In addition to the adoption of IFRS 9 and 15, which had no impact as mentioned in notes 2.1.1. and 2.1.2., during the year ended as of December 31, 2018, there were no changes in accounting policies and no material mistakes related with previous periods were identified.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

4. GROUP COMPANIES INCLUDED IN CONSOLIDATION

The affiliated companies included in consolidation method and share of capital held as of December 31, 2018 and 2017, are as follows:

	Effective
Companies	Percentage Held
	2018	2017
Toyota Caetano Portugal, S.A.	Parent Company
Saltano - Investimentos e Gestão (S.G.P.S.), S.A.	99,98%	99,98%
Caetano Auto CV, S.A.	81,24%	81,24%
Caetano Renting, S.A.	99.98%	99.98%
Caetano - Auto, S.A.	98,40%	98,40%

These subsidiaries were included in the consolidated financial statements using the full consolidation method, as established in IFRS 10 - "Consolidated Financial Statements" (subsidiary control through the rights and exposure to variable returns in relevant activities).

Changes in the consolidation perimeter

During the year ended December 31, 2018 and 2017 there was not occurred any change in the composition of the consolidation perimeter.

INTANGIBLE ASSETS 5.

During the year ended as December 31, 2018 and 2017, the movement in intangible assets, as well as in the respective accumulated amortization and accumulated impairment losses, was as follows:

		2018
	Research and Development Expenses	Industria Property	Goodwill	Computer Programs	Intangible Assets in progress	Total
Gross Assets:
Opening Balances	1.477.217	399.378	81.485	2.150.170		4.108.250
Additions		153.701				153.701
Disposals and Write-offs		(2.048)				(2.048)
Ending Balances	1.477.217	551.031	81 485	2.150.170		4.259.903
Accumulated Amortization and Impairment losses:
Opening Balances	1.449.781	76.558	81.485	2.087.579	-	3.695 403
Amortizations	27.436	122.491		55.127	-	205.054
Disposals and Write-offs		(918)			-	(918)
Ending Balances	1.477.217	198.131	81 485	2.142.706	l	3.899.539
Net Intangible Assets		352.900		7 464		360 364

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

		2017
	Research and Development Expenses	ndustria Property	Goodwill	Computer Programs	Intangible Assets in progress	Tota
Gross Assets:
Opening Balances	1.477.217	312.774	81 485	2.139.437	160.840	4.171.753
Additions		61.875		22.395		84.270
Disposals and Write-offs	1	(136.111)	-	(11.662)		(147.773)
Transfers		160.840			(160.840)
Ending Balances	1.477.217	399.378	81 485	2.150.170		4.108.250
Accumulated Amortization and Impairment losses:
Opening Balances	957.375	184.337	81 485	1.870.724		3.093.921
Amortizations	492.406	28.332		220.743		741.481
Disposals and Write-offs		(136.111)		(3.888)		(139.999)
Ending Balances	1 449,781	76.558	81.485	2,087,579	-	3,695,403
Net Intangible Assets	27.436	322,820		62.591		412.847

(Amounts in Euros)

6. TANGIBLE FIXED ASSETS

During the years ended as of December 31, 2018 and 2017, the movement in tangible fixed assets, as well as in the respective accumulated depreciation and accumulated impairment losses, was as follows:

2018
	Land	Buildings and Other Constructions	Machinery and Equipment	Transport Equipment	Administrative Equipment	Other Fixed Assets	Tangible assets in Progress	Total
Gross Assets:
Opening Balances	16.443.805	89.685.756	61.157.213	80.675.537	8.409.708	4.451.433	291.742	261.115.014
Additions	2.549.082	1.508.970	1.270.847	62.788.359	254 092	60.398	1.028.377	69.460.125
Disposals and Write-offs	(72.835)	(823.060)	(625.262)	(5.905.222)	(242.328)	(5.232)	(6.340)	(7.680.279)
Transfers		180.903		(37.930.596)			(180.903)	(37.930.596)
Ending Balances	18.920.052	90.552.569	61.802.798	99.627.898	8.421.472	4.506.599	1.132.876	284.964.264
Accumulated Depreciation and Impairment losses:
Opening Balances	-	61.197.250	56.632.165	33.601.857	7.678.403	4.183.729		163,293,404
Depreciations	-	2.170.390	1.011.765	19,607,743	(111.369)	66,036		22,744,565
Disposals and Write-offs	-	(508.333)	(436.663)	(3.521.393)	(228.860)	(4.220)		(4.699.469)
Transfers	-			(9.166.928)				(9.166.928)
Ending Balances	l	62.859.307	57,207,267	40,521,279	7,338,174	4,245,545	-	172.171.572
Net Tangible Assets	18.920.052	27.693.262	4.595.531	59.106.619	1.083.298	261 054	1.132.876	112,792,692

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

			2017
	Land	Buildings and Other Constructions	Machinery and Equipment	Transport Equipment	Administrative Equipment	Other Fixed Assets	Tangible assets in Progress	Total
Gross Assets:
Opening Balances	16.471.765	91.068.416	60.432.512	64.700.926	8.124.372	4.370.111	9.400	245.177.502
Additions	387.033	1.817.873	711.139	49.425.531	285.336	81.322	328.696	53,036,930
Disposals and Write-offs	(414.993)	(3.218.492)	(5.238)	(33.451.100)				(37.089.823)
Transfers		17.959	18.800				(46.354)	(9.595)
Ending Balances	16.443.805	89.685.756	61.157.213	80.675.537	8.409.708	4.451.433	291.742	261.115.014
Accumulated Depreciation and Impairment losses:
Opening Balances		61.185.509	55.591.865	30.504.452	7.512.127	4.119.149		158.913.102
Depreciations		2.129.483	1.045.563	13.822.988	166.205	64.073		17.228.312
Disposals and Write-offs		(2.116.654)	(4.685)	(10.725.583)				(12.846.923)
Transfers		(1.088)	(578)		71	507		(1.088)
Ending Balances	-	61.197.250	56.632.165	33.601.857	7.678.403	4.183.729		163,293,404
Net Tangible Assets	16,443,805	28,488,506	4.525.048	47.073.500	731.305	267.704	291.742	97.821.610

The additions registered in 2018 in "Land" and "Buildings and Other Constructions" are mainly due related to the acquisition of lands in Vila Nova de Gaia and Gondomar and facilities in Maia. The disposals and write-offs refers to the sale of buildings in Loures and Leiria.

In 2017, the increase recorded in "Land" and "Buildings and Other Constructions" are related to Santa Maria da Feira and Caldas da Rainha Stands.

The movements registered in item "Transport Equipment" mainly refer to vehicles and forklifts that are being used by the Group as well as being rented, under operating lease, to clients.

As of December 31, 2018, and 2017, the assets acquired through financial leases are presented as follows:

	2018
	Gross Accumulated Assets Depreciation Net Value
Fixed Tangible Assets	58.983.523	23.003.655	35.979.868
		2017
	Gross Assets	Accumulated Depreciation	Net Value
Fixed Tangible Assets	38.347.047	15.416.229	22.930.819

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

INVESTMENT PROPERTIES 7.

As of December 31, 2018 and 2017, the caption "Investment properties" refers to real estate's assets held to obtain gains through its rental or for capital gain purposes. These real estate assets are recorded at acquisition cost.

Rentals related to "Investment properties" amounted to 2.820.267 Euros in the year ended as of December 31, 2018 (3.550.376 Euros 31, December 2017).

Additionally, in accordance with reference to 2018, the fair value of those investment properties amounts to, approximately, 46 million Euros.

Management believes that a possible change (within a scenario of normal) in the main assumptions used in calculating the fair value will not result in impairment losses recognized in previous years.

The real estate assets recorded in the caption "Investment properties" as of December 31, 2018 and 2017 are made up as follows:

	2018			2017
Location	Net accounting value	Fair Value	Appraisa	Net accounting value	Fair Value	Appraisal
Vila Nova de Gaia - Av. da República Braga - Av. da Liberdade Porto - Rua do Campo Alegre Viseu - Teivas Óbidos - Casal do Lameiro Castro Daire - Av. João Rodrigues Cabrilho Caldas da Rainha - Rua Dr. Miguel Bombarda Viseu - Quinta do Cano Amadora - Rua Elias Garcia Portalegre - Zona Industrial Portimão - Cabeço do Mocho Vila Real de Santo António - Rua de Angola Rio Maior S. João da Lourosa - Viseu Vila Nova de Gaia - Av. Vasco da Gama (edifícios A e B) Vila Nova de Gaia - Av. Vasco da Gama (edifícios G) Carregado - Quinta da Boa Agua / Quinta do Peixoto Lisboa - Av. Infante Santo Vila Nova de Gaia - Rua das Pereira Leiria - Azóia	84.202 795.350 762.388 17.531 1.713.586 177.559 178.674 424.782 23.911 107.000 452.472 2.802.242 804.483 4.989.846 237,553	1.192.400 1.355.000 3.315.000 896.000 85.000 1.625.750 149.000 173.000 550.000 83.000 107.000 487.030 8.692.000 6.077.000 19.218.000 788.000	internal internal externa internal internal internal internal internal internal internal internal internal internal internal internal internal	84.202 201 818.315 813.132 57.867 25.512 17.531 1.726.300 181.017 183.816 424.781 23.911 107.000 456.272 3.019.591 841.109 5.038.392 1.141.201 249.386 355.125	1.192.400 1.355.000 2.984.000 896.000 1.400.000 58.000 85.000 1.625.750 149.000 173.000 550.000 83.000 107.000 487.030 8.692.000 6.077.000 19.218.000 1.300.000 788.000 797.000	internal internal externa internal internal internal internal internal/externa internal internal external internal internal internal internal internal internal internal internal internal
Castelo Branco - Oficinas	759.135	1.100.000	externa	798.537	1.450.000	internal
	14.330.714	45,893,180		16.363.198	49,467.180

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The investment properties fair value disolosed in December 31, 2017 was determined on an annual basis by an independent appraiser (the fair value was determined by the average of the evaluations by Market Method, Cost Method and Return Method).

In accordance to the classification of the evaluation methods mentioned above, and related with the fair value hierarchy (IFRS 13), they are classified as follows:

• Market Method Level 2 (fair value determined based on observable market data)
• Cost Method and Return Method Level 3 (fair value determined based on non-observable market data, developed to reflect assumptions to be used by independent appraisers.

Additionally, as a result of all internal assessments prepared by the remaining properties and given the nonexistence of major works in 2018, the absence of relevant claims in 2018 and the lack of properties in areas of accelerated degradation, is convinced the administration of that there has been no significant change to the fair value of these properties in 2018, believing they are still valid and current values of the last external evaluation carried out in late 2012, 2013, 2014, 2016, 2017 and 2018.

The rentals obtained related to the investment properties above mentioned are disclosed in Note 31.

The movement in the caption "Investment properties" as of December 31, 2018 and 2017 was as follows:

31/12/2018
Gross Assets:	Land	Buildings	Total
Opening Balances	10.135.964	36.926.442	47.062.406
Additions		20.775	20.775
Disposals and Write-offs	(830.305)	(1.538.441)	(2.368.746)
Ending Balances	9.305.659	35.408.776	44.714.435
Accumulated Depreciation and mpairment Losses: Opening Balances		30.699.208	30.699.208
Additions		473.690	473.690
Disposals and Write-offs		(789.177)	(789.177
Ending Balances		30.383.721	30,383,721
Net value	9.305.659	5.025.055	14.330.714

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

31/12/2017
Gross Assets:	Land	Buildings	Tota
Opening Balances	10.268.017	39.133.728	49.401.745
Additions		8.095	8.095
Disposals and Write-offs	(132.053)	(2.224.976)	(2.357.029)
Transfer		9 595	9.595
Ending Balances	10.135.964	36,926,442	47.062.406
Accumulated Depreciation and Impairment Losses:
Opening Balances		31 498 734	31.498.734
Additions		641.719	641.719
Disposals and Write-offs		(1.442.333)	(1.442.333)
Transfer		1.088	1.088
Ending Balances		30,699,208	30,699,208
Net value	10.135.964	6.227.234	16.363.198

(Amounts in Euros)

In 2018, the disposals and write-offs mainly refer to Land of Buildings in Azóia, Infante Santo, Obidos e Castro Daire. In 2017, the disposals and write-offs mainly refer to Land of Buildings in Viana de Castelo.

The accumulated impairment losses recorded in 2018 and 2017 amounts to 2.628.814 Euros.

GOODWILL 8.

At December 31, 2018 and 2017 there were not any movements in item "Goodwill".

The item "Goodwill" is totally related to the amount calculated in the affiliate Movicargo whose business was transferred to the parent Toyota Caetano Portugal, S.A.

The Goodwill is not amortized. Impairment tests are made annually to the Goodwill.

For impairment analysis, the recoverable amount was determined based on the value in use, according to the discounted cash flows model, based on business plans developed by the people in charge and approved by the management and using discount rates that reflect the risks inherent of the business.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

On December 31, 2018, the method and main assumptions used were as follows:

	BT Industrial Equipment Division - South
Goodwill	611.997
Period	Projected cash flows for 5 years
Growth rate (g) (1)	1.6%
Discount rate (2)	5.98%

1 Growth rate used to extrapolate cash flows beyond the period considered in the business plan 2 Discount rates applied to projected cash flows

The Management, supported by the estimated discounted concluded that on December 31, 2018, the net book value of assets, including goodwill (0,6 millions Euros), does not exceed its recoverable amount (38 millions Euros).

The projections of cash flows were based on historical performance and on expectations of improved efficiency. The management believe that a possible change (within a normal scenario) in key assumptions used in calculating the recoverable amount will not result in impairment losses.

9. INSTRUMENTS AT FAIR VALUE THROUGH CAPITAL AND AVAILABLE FOR SALE FINANCIAL ASSETS

As of December 31, 2018, and 2017 the movements in item "instruments at fair value through capital" and " Available for sale financial assets" were as follows:

	2018	2017
Available for sale financial assets (ASFA)
Fair value at January 1		3.483.128
Increase/(decrease) in fair value		249.372
		3.732.500
Instruments at fair value through capital
Fair value at January 1 (Reclassified from ASFA - IFRS9)	3.732.500
Increase/(decrease) in fair value	(99.087)
Ending Balances	3.633.413	3.732.500

As of December 31, 2018, "Instruments at fair value through capital" include the amount of 3.566.677 Euros (3.665.764 Euros December 31, 2017) corresponding to 580.476 shares of Cimóvel - Real Estate Investment Fund (9,098%), which are recorded at its fair value (the acquisition cost of those shares ascended to 3.013.947 Euros and accumulated change in fair value to 552.731 Euros. The remaining "Instruments at fair value through capital" refer to small investments in non-listed companies. The Board of Directors consider that the net accounting value is similar to its fair value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Additionally, the impact in equity and impairment losses in 2018 and 2017 from recording "Instruments at fair value through capital" at fair value can be summarized as follows:

	2018	2017
Variation in fair value	(99.087)	249,372
Equity effect	(99.087)	249,372

10. INVENTORIES

As of December 31, 2018 and 2017, this caption breakdown is as follows:

Raw and subsidiary Materials 8.885.206 10.413.228 Production in Process 932-748 1.135.391 Finished and semi-finished Products 1.242.750 4.432.510 Merchandise 90.219.827 81.473.495 101.280.531 97.454.624 Accumulated impairment losses in inventories (Note 24) (2.221 105) (1.452.410) 99.059.426 96.002.214	2018	2017

During the years ended as of December 31, 2018 and 2017, cost of sales was as follows:

	2018			2017
		Raw and			Raw and
	Merchandise	subsidiary	Total	Merchandise	subsidiary	Total
		Materials			Materials
Opening Balances	81.473.495	10.413.228	91.886.723	72.612.904	9.307.008	81.919.912
Net Purchases	294.586.733	36.963.974	331.550.707	294.478.045	36.600.292	331.078.337
Transfers	37.930.598		37.930.598			-
Ending Balances	(90.219.827)	(8.885.206)	(99.105.033)	(81.473.495)	(10.413.228)	(91.886.723
Total	323.770.999	38.491.996	362.262.995	285.617.454	35.494.072	321.111.526

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

During the years ended as of December 31, 2018 and 2017, the variation was computed as follows:

	Finished and semi-finished products
	2018	2017
Ending Balances	2.175.498	5.567.901
Inventories adjustments	(5.370)	1.092
Opening Balances	(5.567.901)	(2.404.508)
Total	(3.397.773)	3.164.485

11. ACCOUNTS RECEIVABLE

As of December 31, 2018 and 2017, the detail of this caption was as follows:

	CURRENT ASSETS		NON CURRENT ASSETS
	2018	2017	2018	2017
Customers, current accounts	56.648.436	51.998.006	494.293	169.252
Doubtful Accounts Receivable	8.838.044	9.209.269
	65.486.480	61.207.275	494.293	169.252
Accumulated impairment losses in accounts Receivable (Note 24)	(8.776.958)	(9.184.332)
	56.709.522	52.022.943	494.293	169.252

Accounts receivable from customers recorded as non-current assets corresponds to the affiliated company Caetano Auto, S.A. that are being paid under formal agreements (whose terms of payment may vary between 1 to 7 years, and which bear interests).

Accounts receivable ageing

2018
						Total
		- 60 days	60-90 days	90-120 days	+ 120 days
Accounts receivable		31.284.576	5.780.752	2.176.100	9.791.002	49.032.430
Employees		77.032	780	2.732	200.911	281 455
Independent Dealers		7.426.444	363.223	27.689	11.488	7.828.844
	Total	38.788.052	6.144.755	2.206.521	10.003.401	57.142.729

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

2017
		- 60 days	60-90 days	90-120 days	+ 120 days	Total
Accounts receivable		32.869.819	2.953.707	934.365	8.414.656	45.172.547
Employees		123.793	7.277	2.449	422.541	556.060
Independent Dealers		6.318.241	77.652		42.758	6.438.651
	Total	39.311.853	3.038.636	936.814	8.879.955	52.167.258

Accounts receivable ageing considering impairment losses

2018
		- 60 days	60-90 days	90-120 days	+ 120 days	Total
Doubtful Accounts Receivable		14.123	2 275	1.378	8.820.268	8.838.044
	Total	14 123	2.275	1.378	8,820,268	8.838.044

2017
		- 60 days	60-90 days	90-120 days	+ 120 days	Total
Doubtful Accounts Receivable		14 610	6.337	3.607	9.184.715	9.209.269
	Total	14 610	6.337	3.607	9.184.715	9.209.269 1

The amounts presented in the consolidated Statement of financial position are net of accumulated impairment losses to doubtful accounts receivable estimated by the Group, in accordance with its experience based on its evaluation of the economic environment at the statement of financial position date. Credit risk concentration is limited, because the customers' basis is wider and not relational. Thus, the Board of Directors understands that the accounting values of accounts receivable are similar to their respective fair value.

Accounts receivable ageing against maturity

	2018
	Not Due	- 60 days	60-90 days	90-120 days	+ 120 davs	l otai
Accounts receivable	15.507.326	28.100.550	2.700.057	1.283.518	9.551.278	57.142.729
Total I	15.507.326	28.100.550	2.700.057	1.283.518	9.551.278	57.142.729

			2017
	Not Due	- 60 days	60-90 days	90-120 days	+ 120 days	l otal
Accounts receivable	15.262.145	24.921.627	3.164.621	893.172	7.925.693	52.167.258
Total I	15.262.145	24.921.627	3.164.621	893.172		7.925.693

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

12. OTHER CREDITS

As of December 31, 2018 and 2017, the detail of this caption was as follows:

	Current Assets
	2018	2017
Down Payments to Suppliers	18.621	352.475
Public entities (VAT)	3.051.511	3.364.036
Other debtors	2.748.473	2.825.198
	5.818.605	6.541.709

The caption "Other credits" includes, as of December 31, 2018, the amount of, approximately, 800.000 Euros to be received from Salvador Caetano Auto Africa, S.G.P.S., S.A. (800.000 Euros as of December 31, 2017).

Finally, this caption also caption includes, as of December 31, 2018, the amount of, approximately, 618.000 Euros to be received from Salvador Caetano Foundation (618.000 Euros at December 31, 2017).

13. OTHER CURRENT ASSETS

As of December 31, 2018 and 2017, the detail of this caption was as follows:

	2018	2017
Accrued Income
Fleet programs	2.366.089	1.697.298
Rappel	1.374.158	1.065.782
Commission	508.148	544 385
Warranty claims	159.112	317.245
Fees	22.699	67.828
Staff	27.842	31.828
Others	583.031	413.534
	5.041.079	4 137.900
Deferred Expenses
Insurance	178.892	410.233
Rentals	128.636	142.534
Interest	125.116	100.358
Others	857,657	430.428
	1.290.301	1.083.553
Total	6.331.380	5.221.453

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

14. DEFERRED TAXES

The detail of deferred tax assets and liabilities recorded in the accompanying consolidated financial statements as of December 31, 2018 and 2017 is as follows:

	2018
	2017	Other variations	Profit and Loss Impact (deferred tax)	Equity Impact	2018
Deferred tax assets:
Provisions not accepted for tax purpose	212.335		84.104		296.439
Defined Benefit Plan Liabilities	1.611 745				1.611.745
Write-off of tangible assets	489.298		437.448		926.746
	2.313.378		521.552		2.834.930
Deferred tax liabilities:
Depreciation as a result of legal and free revaluation of fixed assets	(619.498)		28.981		(590.517)
Effect of the reinvestments of the surplus in fixed assets sales	(116.914)		3,547		(113.367)
Fair value of investments fixed assets	(898.732)				(898.732)
	(1.635.144)		32.528		(1.602.616)
Net effect (Note 25)			554 080

	2017
	2016	Other variations	Profit and Loss mpact (deferred tax)	Equity Impact	2017
Deferred tax assets:
Provisions not accepted for tax purpose	294.573		(82.238)		212.335
Tax losses	88.569		(88.569)
Defined Benefit Plan Liabilities	1.611.745				1.611.745
Write-off of tangible assets	193.155		296.143		489 298
Derivative financial instruments valuation	6.396		(6.396)
Corporate Income Tax - RETGS		710.552	(710.552)
	2.194.438	710.552	(591.612)		2.313.378
Deferred tax liabilities:
Depreciation as a result of legal and free revaluation of fixed assets	(652.772)		33.274		(619.498)
Effect of the reinvestments of the surplus in fixed assets sales	(165.771)		48.857		(116.914)
Fair value of investments fixed assets	(898.732)				(898.732)
	(1.717.275)		82.131		(1.635.144)
Net effect (Note 25)			(509.481)

At December 31, 2018 and 2017 there was no tax losses.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

As of December 31, 2018 and 2017 tax rates used to compute current and deferred tax assets and liabilities were as follows:

		Tax rates
	2018	2017
Country of origin of affiliate:
Portugal	22,5% - 21%	22,5% - 21%
Cape Verde	25,5%	25.5%

Toyota Caetano Group companies with head office in Portugal, are taxed according to the Corporate Income Tax (CIT) in accordance with the Special Taxation Regimen ("Regime Especial de Tributação de Grupos de Sociedades - RETGS") as established by articles 69 and 70 of the CIT.

In accordance with the applicable legislation, the income tax returns of Toyota Caetano and other Group companies with headquarters in Portugal are subject to review and correction by the tax authorities for a period of four years. Therefore, the tax declarations since the year of 2015 and 2018 are still subject to review. Statements regarding the Social Security may be revised over a period of five years. The Board of Directors believe that the corrections that may arise from such reviews/ins will not have a significant impact in the accompanying consolidated financial statements.

Under the terms of article 88 of the Corporate Income Tax Code, the companies with headquarters in Portugal are additionally subject to an income tax over a set of expenses at the rates foreseen in the above mentioned article.

15. CASH AND CASH EQUIVALENTS

As of December 31, 2018, and 2017 cash and cash equivalents detail was the following:

	2018	2017
Cash Bank Deposits	127.757 16.947.398 17.075.155	122.985 17.144.585 17.267.570

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

16. EQUITY

Share Capital

As of December 31, 2018 and 2017, the Company's share capital, fully subscribed and paid for, consisted of 35.000.000 bearer shares, with a nominal value of 1 Euro each.

The entities with over 20% of subscribed capital are as follows:

- Salvador Caetano - Auto - S.G.P.S., S.A.	65.99%
- Toyota Motor Europe NV/SA	27.00%

During 2017 Salvador Caetano - Auto - S.G.P.S., S.A. bought 1.488.960 shares with a nominal value of 1 Euro each, fully subscribed and representing 4,25% of the share capital. During 2018 Salvador Caetano - Auto - S.G.P.S., S.A. bought 320.611 shares with a nominal value of 1 Euro each, fully subscribed and representing 0,91% of the share capital.

Dividends

The Board of Directors will propose that a dividend shall be paid in the amount of 7.000.000 Euros. This proposal must be approved in the next General Shareholders Meeting.

Legal reserve

Commercial legislation establishes that at least 5% of the net profit of each year must be a legal reserve until this reserve equals the statutory minimum requirement of 20% of the share is not available for distribution, except in case of dissolution of the Company, but may be used in share capital increases or used to absorb accumulated losses once other reserves have been exhausted.

Revaluation reserves

The revaluation reserves cannot be distributed to the shareholders, except if they are completely and if the respective assets that were revaluated have been alienated.

Translation reserves

The translation reserves reflect the currency variations during the passage of the financial statements of affiliated companies in a currency other than Euro and cannot be distributed or used to absorb losses.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Fair value reserves

The fair value reserves reflect the fair value variations of the investments available for sale and cannot be distributed or used to absorb losses (Note 9).

Other Reserves

Refer to reserves with nature of free reserve that can be distributable according to the commercial legislation.

According to the Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of Toyota Caetano Portugal, presented according to the Normas Contabilísticas e de Relato Financeiro (NCRF, Portuguese GAAP).

17. NON CONTROLLING INTERESTS

Movements in this caption during the year ended as of December 31, 2018 and 2017 were as follows:

	2018	2017
Opening Balances as of January, 1 Net profit attributable to Non controlling Interests	1.387.418 85.804 1.473.222	1.294.261 93.157 1.387.418

As of December 31, 2018 and 2017, the decomposition of the mentioned value by subsidiary company is as follows:

2018	% NCI	Non controlling Interest	Net profit attributable to
			Non controlling Interest
Saltano S.G.P.S.	0,02%	4.030	(5)
Caetano Auto CV	18,76%	838.107	25.855
Caetano Renting	0.02%	464	(117)
Caetano Auto	1,60%	630.621	60.071
		1.473.222	85.804

2017	% NCI	Non controlling Interest	Net profit attributable to Non controlling Interest
Saltano S.G.P.S.	0,02%	4 035
Caetano Auto CV	18,76%	812.252	67.276
Caetano Renting	0,02%	563	(4)
Caetano Auto	1,60%	570.568	25.885
		1.387.418	93.157

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The resume of financial information related to each subsidiary that is consolidated is presented below:

		Caetano Auto		Caetano Auto CV
Caption	2018	2017	2018	2017
Non - Current Assets	56.490.292	46.825.112	1.257.814	1.326.277
Current Assets	90.240.546	79.643.872	5.692 940	6.255.499
Total assets	146.730.838	126.468.984	6.950.754	7.581.776
Non - Current Liabilities	8.052.611	7.094.168	98.878	98.878
Current Liabilities	99.202.695	83.620.907	2.322.266	3.176.956
Equity	39.475.532	35.753.909	4.529.610	4.305.942
Revenues	234.877.024	212.093.511	14.733.922	12.649.730
Operating Results	5.127.518	4.519.938	356.168	548.386
Financial Results	31.019	(11.567)	(6.629)	(43.973)
Taxes	(1.436.915)	(1.170.609)	(125.871)	(148.562)
Net Income	3.721.623	3.337.762	223,668	355.851

	Caetano Renting		Saltano
Caption	2018	2017	2018	2017
Non - Current Assets	34.435.165	27 429.048	23.789.240	21.673.269
Current Assets	5.875.043	7.238.681	2.016.167	2.041.338
Total assets	40.310.208	34.667.729	25.805.406	23.714.607
Non - Current Liabilities	529,369	200-014
Current Liabilities	36.561.509	31.425.093	3.574.436	3.579.125
Equity	3.219.329	3.042.622	22.230.970	20.135.482
Revenues	42.240.170	7.195.384
Operating Results	477.981	337.232	2.089.542	1.703.933
Financial Results	(308.190)	(293.332)
Taxes	6.916	(73.202)	5.946	1.262
Net Income	176,707	(29.303)	2.095.488	1.705.195

18. BANK LOANS AND LEASINGS

As of December 31, 2018 and 2017 the caption "Loans" was as follows:

	2018			2017
	Current	Non Current	TOTAL !	Current	Non Current	TOTAL
Bank Loan	29.400.000	10.000.000	39.400.000	46.400.000	10.000.000	56.400.000
Overdrafts	923.669		923.669	529.851		529 851
Car Financing	2.499.961		2.499.961
Bond Loan		12.500.000	12.500.000
Leasing	19.715.283	15.965.142	35,680,425	6.094.942	16.914.001	23.008.943
	52.538.913	38.465.142	91.004.055	53.024.793	26.914.001	79.938.794

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The movements in bank loans, overdrafts, commercial paper programs and bond loan, during the periods ended December 31, 2018 were as follows:

	Opening Balances	Increase	Decrease	Other variations (*)	Ending Balance
Bank Loan	17-000-000		7.000.000		10.000-000
Overdrafts	529.851			393.818	923.669
Car fimancing				2.499.961	2.499.961
Guaranteed account	5.000.000	37.000.000	32.000.000		10.000.000
Confirming		19.883.075	19.883.075
Commercial Paper	34.400.000	237.100.000	252.100.000		19.400.000
Bond Loan		12.500.000			12.500.000
Leasing	23.008.943		7.731.336	20.402.818	35.680.425
	79.938.794	306.483.075	318.714.411	23.296.597	91.004.055

(*) Without impact on consolidated cash flows statement

As of December 31, 2018 and 2017, the detail of bank loans, overdrafts, commercial paper programs and bond loan, as well as its conditions, were as follows:

	2018
Description/Beneficiary Company	Used Amount	Limit	Beginning Date	Date-Limit
Non-current
Mutual Loans
Toyota Caetano Portugal	10.000.000	10.000.000	11/03/2016	5 years
Bond Loan
Toyota Caetano Portugal	12.500.000	12.500.000	09/08/2018	5 years
	22.500.000	22.500.000
Current
Guaranteed account	10.000.000	12.000.000
Bank Overdrafts	923.669	5.500.000
Confirming		10.000.000
Car financing	2.499.961	13.500.000
Commercial Paper:
Toyota Caetano Portugal	15.400.000	18.000.000	27/02/2017(*)	3 years
Toyota Caetano Portugal		10.000.000	18/08/2015	5 years
Toyota Caetano Portugal	4.000.000	4.000.000	17/07/2017	5 years
Toyota Caetano Portugal		5.000.000	10/11/2016	5 years
Toyota Caetano Portugal		4.000.000	24/02/2018	1 year
	32,823,630	82.000.000
	55.323.630	104.500.000

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

	2017
Description/Beneficiary Company	Used Amount	Limit	Beginning Date	Date-Limit
Non-current
Mutual Loans
Toyota Caetano Portugal	10,000.000	10.000.000	11/03/2016	5 years
	10.000.000	10.000.000
Current
Guaranteed account	5-000-000	7.000.000
Mutual Loans	7.000.000	7.000.000	15/10/2014	4 years
Bank Overdrafts	529.851	5.500.000
Commercial Paper:
Toyota Caetano Portugal	16.400.000	16.400.000	27/02/2017(*)	3 years
Toyota Caetano Portugal	10-000-000	10.000.000	18/08/2015	5 years
Toyota Caetano Portugal	4.000.000	4.000.000	17/07/2017	5 years
Toyota Caetano Portugal	4.000.000	4.000.000	24/02/2017	1 year
Toyota Caetano Portugal		5.000.000	10/11/2016	5 years
	46.929.851	58.900.000
	56.929.851	68.900.000

(*) with amortization of 2 million euros per year

Then we detail the amount related to loans obtained or contracted credit lines for which real guarantees were granted for mortgages on real estate (Note 36):

• Commercial Paper: 15.400.000

Interests relating to the financial instruments mentioned above are indexed to Euribor (floor zero), plus a spread which varies between 0,85% and 2,75%.

The Group and its affiliates have available credit facilities as of December 31, 2018 amounting to approximately 91 Million Euros, which can be used in future operational activities and to fulfil financial commitments. There are no restrictions on the use of these facilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The item "Leasing" (current and non current) is related to the purchase of facilities and equipment. The detail of this caption, as well as the reimbursement plan can be summarized as follows:

		Current			Non current
Contract	Leasings	12m	12 - 24m	24 - 36m	36 - 48m	>48m	TOTAL	TOTAL
2028278	Commercial facilities
	Capital	97.895	98.632	119.047			217,679	315.574
	Interests	2.031	1.294	551			1.845	3.876
5653	Commercial facilities
	Capital	24.610	24.995	25.385	25.781	342.974	419.135	443.745
	Interests	6.704	6.320	5.929	5.533	32.043	49.825	56.529
626064	Commercial facilities
	Capital	172.274	178.402	184.747	191.318	343.240	897.707	1.069.981
	Interests	34.101	27.974	21.629	15.058	9.626	74.287	108.388
2032103	Commercial facilities
	Capital	14.824	15.582	16.379	55.912		87.873	102.697
	Interests	4 798	4.040	3.243	787		8.070	12.868
30000343	Commercial facilities
	Capital	41.592	42 431	43.288	44.161	391.126	521.006	562.598
	Interests	10,872	10.033	9.176	8.302	32.219	59.730	70.602
2017554	Commercial facilities
	Capital	45.507	46.658	142.212			188.870	234 377
	Interests	5.340	4.190	1.399			5,589	10.929
05149	Commercial facilities
	Capital	33.100	34.150	16.729			50.879	83.979
	Interests	2.153	1.104	148			1.252	3.405
Various	Vehicles
	Capital	13.355.412	529,369				529.369	13.884.781
	Interests	136.334	1.768				1 768	138.102
Various	Industrial Equipment
	Capital	5.930.069	5.058.018	3.907.707	2 780 941	1,305,958	13.052.624	18.982.693
	Interests	490.907	283.461	160.876	72.172	22.932	539.441	1.030.348
	Total Capital	19.715.283	6.028.237	4 455 494	3.098.113	2.383.298	15.965.142	35.680.425
	Total Interests	693.240	340.184	202.951	101.852	96.820	741.807	1.435.047

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Liabilities by Maturity:

Loans

	12m	12 — 24m	24 -36m	36 - 48 m	> 48m	Total
Mutual Loans			10.000.000			10.000.000
Guaranteed account	10.000.000					10.000.000
Bank Credits	923 669					923.669
Car Financing	2.499.961					2.499.961
Commercial Paper	19.400.000					19.400.000
Bond Loan					12.500.000	12.500.000
Leasing	19.715.283	6.028.237	4.455.494	3.098.113	2.383.298	35.680.425
Total Loans	52.538.913	6.028.237	14.455.494	3.098.113	14.883.298	91.004.055

Interests

		12m	12 - 24m	24 - 36m	36 - 48m	>48m	Total
Loan - mutual contract		220.521	221.125	54.375			496.021
Bond Loan		316.840	318.576	315.972	316.840	316.840	1.585.068
Financial Leases		693.240	340.184	202.951	101.852	96.820	1.435.047
	Total interests I	1.230.601	879.885	573.298 - -	418.692	413.660	3.516.136

19. ACCOUNTS PAYABLE

As of December 31, 2018 and 2017 this caption was composed of current accounts with suppliers, which end at short term.

The Group, relating to financial risk management, has implemented policies to ensure that all liabilities are paid for within the defined payment period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

20. OTHER CREDITORS

As of December 31, 2018 and 2017 the detail of other creditors was as follows:

		Current Liabilities
	2018	2017
Income Taxes withheld	376.634	371 448
Value Added Taxes	9.438.099	8.367.662
Vehicles Tax	2.275.238	1.863.835
Custom Duties	381	3.182
Employee's social contributions	682.841	675.338
Taxes of local Authorities	207.376	233.680
Others	14.364	4.954
Public Entities - Sub-total	12.994.933	11.520.099
Shareholders	15.542	10.618
Advances from Customers	736.091	996.238
Other Creditors	1.037.283	680.655
	1.788.916	1.687.511
Other Creditors - Sub-total	14.783.849	13.207.610

There are no debts related to public entities (State and Social Security).

21. PUBLIC ENTITIES (Statement of financial position)

As of December 31,2018 and 2017 the caption public entities can be summarized as follows:

	2018	2017
Income Taxes Estimated Tax	1.939.181	1 716.581
	1.939.181	1.716.581

The aforementioned value in 2018 of estimated to Special Taxation Regimen for Groups of Companies ("RETGS") (1.6 million euros in 2017).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Then is presented the decomposition of current income tax expense (see additional information in note 25):

Current taxes	2018	2017
Insufficient Tax (Note 25)		8.586
Tax Refunds (Note 25)	(439)	4 552
Current taxes estimation (Note 25)	5.316.334	2.899.055
Deferred income taxes (Note 14)	(554.080)	509,481
	4.761.815	3.421.674

22. OTHER CURRENT LIABILITIES

As of December 31, 2018 and 2017 the caption "Other Current Liabilities" was as follows:

	2018	2017
Accrued Cost
Vacation pay and bonus	5.993.832	5.032.601
Advertising Campaigns	3.594.310	4.526.941
Specialization cost assigned to vehicles sold	779.842	1.209.909
Commission	967.344	834 344
Supply costs	363.377	639.876
Advance External Supplies and Services	489.929	544 552
Accrual for Vehicles Tax	804 876	451.103
Rappel charges attributable to fleet managers	486.430	402.399
Insurance	220.314	367.337
Municipal Property Tax	126.000	128.970
Interest	236.354	126.409
Royalties	71.170	69.579
Others	2.505.080	1.314.075
	16.638.858	15.648.095
Deferred Income
Vehicle maintenance contracts	5.844.505	3.757.400
Subsidy granted	28.653	501.360
Publicity recuperation	29.283	37.657
Interest Charged to Customers	16.832	18.091
Others	176.425	168.002
	6.095.698	4.482.510
Total	22.734.556	20.130.605

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

23. LIABILITIES FOR RETIREMENT PENSION COMPLEMENTS

Toyota Caetano (together with other associated and related companies) incorporated by public deed dated December 29, 1988, the Salvador Caetano Pension Fund, which was subsequently updated in February 2, 1994, in April 30,1996, in August 9, 1996, in July 4, 2003, in February 2, 2007, in December 23, 2011 and in December 31, 2013.

As of December 31, 2018, the following companies of Toyota Caetano Group were associates of the Salvador Caetano Pension Fund:

• Toyota Caetano Portugal, S.A.
• Caetano Auto Comércio de Automóveis, S.A.
• Caetano Renting, S.A.

The Pension Fund was set up to, while Toyota Caetano Group maintains the decision to make contributions to the referred fund, provide employees (beneficiaries), at their retirement date, the right to a pension complement, which is not subject to update and is based on a percentage of the salary, among other conditions. To cover these responsibilities, it was constituted an Independent Fund (managed by BPI Vida e Pensões, S.A.).

However, following a request to change the functioning of these compensations, requested from the ISP - Instituto de Seguros de Portugal, this Defined Benefit Plan started to cover, as of January 1, 2008, only current retired workers, former employees of the Group with "deferred pensions" and the current employees and staff of the Group over 50 years of age and at least 15 years of service to the Group.

The actuarial presumptions used by the fund manager include, the Mortality Table and disability TV 73/77 and SuisseRe 2001, respectively, as well as salary increase rate, pensions increase rate and discount rate of 1%, 0% and 1,57%, respectively. In 2017, the salary increase rate, pensions increase rate and discount rate were 1%, 0% and 1,6%, respectively.

The movement of the Fund responsibilities of the Group with the Defined benefit plan in 2018 and 2017 can be summarized as follows:

Liability at 1/1/2017	35.967.964
Current services cost	84.381
Interest cost	565.887
Actuarial (gains)/losses	1.505.591
Pension payments	(2.498.993)
Liability at 31/12/2017	35.024.830
Liability at 1/1/2018	35.024.830
Current services cost	74 424
Interest cost	541.905
Actuarial (gains)/losses	(446,442)
Pension payments	(2.460.403)
Other	84.524
Liability at 31/12/2018	32.818.838

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The allocation of this amount during 2018 and 2017 to both plans (Defined benefit plan and Defined contribution plan) can be summarized as follows:

Defined Contribution	Total
11.712.962	39.254.594
191 554	632.310
888.813	2.915.505
(52.771)	(2.551.764)
38.520	38.520
(33.969)	(33.969)
12.745.110	40.255.196
126.481	126.481
589 461	589 461
321.859	877 415
	421 669
	(2.865.088)
	(23.369)
	(589.461)
	(494)
	38.791.810
	(326.869) (589.461) (494) 12.866.087

As of December 31, 2018 and 2017, the breakdown of the asset portfolio of the Fund that covers the defined benefit plan was as follows:

Asset Portfolio	Portfolio Weight	Value 31-12-2018	Portfolio Weight	Value 31-12-2017
Stocks	10.53%	2.729.978	11.69%	3-215-929
Bonds	36.11%	9.361.779	35.88%	9.870.620
Real Estate	39.44%	10.225.105	39,43%	10.847.228
Cash	7.04%	1.825.171	10.67%	2 935-326
Other Assets	6.88%	1.783.690	2.33%	640-983
Total	100%	25.925.723	100%	27.510.086

At December 31, 2018, the investments with an individual weight greater than 5% of the total portfolio of assets in the Fund that covers the defined benefit plan was as follows:

Asset	Portfolio Weight	Value
Cimóvel - Fundo de Investimento Imobiliário Fechado	39,44%	10.225.105

The evolution of the Group's responsibilities in the defined benefit plan and the assets of the Fund allocated can be summarized as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

Defined benefit plan	2018	2017	2016	2015	2014	2013	2012
Responsibility amount 32,818,838		35.024.830	35.367.964			33.997.681
Fund Amount	25.925.723	27.510.086	27.541.632			28.297.093	28.444.454

The net obligations of Toyota Caetano Portugal Group evidenced above is safeguarded through a provision recorded in the amount of 9.326.000 Euros, reflected in the item Pension Fund Liabilities.

24. PROVISIONS AND ACCUMULATED IMPAIRMENT LOSSES

Movements occurred in provisions during the years ended as of December 31, 2018 and 2017 were as follows:

	2018
	Opening Balances	Increases	Decreases	Other regularizations	Ending Balances
Accumulated impairment losses in investments	2-780-809				2.780.809
Accumulated impairment losses in accounts Receivable (Note 11)	9.184.332	303-056	(189.918)	(520,512)	8.776.958
Accumulated impairment losses in inventories (Note 10)	1.452.410	1.002.950	(153.406)	(80.849)	2.221.105
Provisions	514.525	695.982	(200.014)	(128.946)	881 547

	2017
	Opening Balances	ncreases	Decreases	Other regularizations	Ending Balances
Accumulated impairment losses in investments Accumulated impairment losses in accounts Receivable (Note 11) Accumulated impairment losses in inventories (Note 10) Provisions	2.780.809 9.443.797 1.532.523 407.105	70.466 99.504 212.991	(17.481) (179.617)	(312.450) (105.571)	2.780.809 9.184.332 1.452 410 514.525

The variation observed in the caption impairment losses is related essentially with write-off of impairments of clients.

25. INCOME TAXES (Income statement)

The income tax for the year ended as of December 31, 2018 and 2017 was as follows:

	2018	2017
Fiscal Losses (RETGS)		710.552
Others	(554.080)	(201.071
Deferred income taxes (Note 14) - Sub-total	(554.080)	509 481
Income Tax (Note 21)	5.315.895	2.912.193
	4.761.815	3.421.674

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

The reconciliation of the earnings before taxes of the years ended at December 31, 2018 and 2017 can be summarized as follows:

	2018	2017
Profit before taxation	17.634.378	12.853.136
Tax on profit	22,50%	22,5%
Theoretical tax charge	3.967.735	2.891.956
Accounting surplus	(560.569)	(723.463)
Fiscally surplus	123.498	327.179
Non deductible expenses	233.459
Fair value adjustments	20.808	(52.368)
Fiscally adjustments	(2.742)	(6.730)
Depreciation not taxed	79.255
Non-deductible provisions	119 494
Others	404.901	145.907
Effective Tax	4.385.839	2.582.481
Additional income tax	930.495	316.574
Excess/Insufficient Tax		8.586
Tax Refunds	(439)	4 552
Income Tax	5.315.895	2.912.193
Deferred income taxes	(554.080)	509 481
Effective tax charge	4.761.815	3.421.674

26. EARNINGS PER SHARE

The earnings per share for the year ended as of December 31, 2018 and 2017 were computed based on the following amounts:

	2018	2017
Earnings Basic Diluted	12.786.759 12,786,759	9.338.305 9.338.305
Number of shares	35.000.000	35.000.000
Earnings per share (basic and diluted)	0,365	0,267

During 2018 and 2017 there were no changes in the number of shares outstanding.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

SEGMENT INFORMATION 27.

The main information relating to the business segment, 2018 and 2017, prepared according to the same accounting onlines and citeria adopted in the preparation of the consolidated financial statements, is as follows:

							2018
				NATIONAL							FOREIGN
		Vehicles			ndustr	ial equipment			Vehicles			Industrial equipment		ELIMINATIONS	CONSOLIDATED
	Industry	Commercial	Services	Renta	Machines	Services	Rental	Others	ndustry	ਦ Commerci	machines	Services	Rental
PROFIT
External Sales	91.034	504.474.453	9 653.01 9	40.375.828	9 .41 629 ഥ	106.987 LC.	4.996.228		47.360.202	24.438.265	143.728	25.230	7.425	(209.287.689	460.014.122
Income
Operational income	406	14,635,439	356.046	390 730	1 249 953	3,047,468	892,980	25.190	20,613	697 473	21,041	13.706	715 ਟ	(2.166.120	19.137.260
Financial Income	6.478	923.543	വ .21 ರಿ	298.487	39.036	17.072)	(42.674)	32	(163.443)	(33.849	(466)	89	23	78	(1.502.882
Net income with non controlling interests	108 9	176.502 10.	263.516	03 ರಿಕ	898.375	248,241	.976 651	9.566	105.965	456.220	5.265	10.102	998	(1.827.246	12.872.563
Total consolidated assets	27.259.333	315.453.824	389.523 0	46 815 36.	.40- 917. 9	957 891	27.607.851	64.562.015	l	7.600.021	1	I		(178.510.829	320.052.49
Total consolidated liabilities	4.910.963	12.773.662 21	594.39 1	648.68 36.	1.748.652	270.185	26.774.122	600 849 3.	l	.895.736 ਟ	-	I		(115.037.879	182.179.362
Capital expenses	554 690	13.076.575	859.235	474.895 18.	l	18.859	5.030.494	888 ਟ	l	149.936	-	-		(399 455	37.868.217
Depreciations	.605 717	.686.726	.840 2.135	.968.684 11.	71.145	66.098	.665 6.231	630	l	176.023	l	l		(104.798	8 61 22.949

57

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

2017

				NATIONAL							FOREIGN
		Vehicles				Industrial equipment				Vehicles		Industrial equipment		ELIMINATIONS	CONSOLIDATED
	ndustry	ದ Commerci	Services	enta B	Machines	Services	Rental	Others	ndustry	Commercial	achines m	Services	Renta
PROFIT
External Sales	20,232	440,334,110	16.047.23	6.037.408	7.697.317	4 702,864	13.710.647		39.348.115	20.363.767	668,804	28.375	.980 റ	(156.707.396	402.261.454
ncome
Operational income	3.471	9.702.678	359,580	264,376	1.121.037	2.757.623	1.066.709	(4.336	1.036.192	619.946	8.518	7.562	4.109	(1.518.923	15.428.542
Financial Income	63.	1.983.225	673 19	229.59	9 51 38	(16,964	105,022)	70	133 482	46.482	2.175	(104)	(38)		(2.575.406)
Net income with non controlling interests	56 ਟ	07.25 9 ഹ	1.648 25.	රි .21 23.	.677 813.	2.060.012	709.917	456 3	678.521	407.660	4.768	606 9	059 3	986.544	9.431.462
Total consolidated assets	34.460.907	.620 6.129 31	050 535. 6	.679 30.358.	055 10.865.	1.918.348	32.138.323	22.038.800	l	7.808.861	-			166.773.971	298.480.671
Total consolidated liabilities	7 736,010	193.465.866	839 406 6.	98 25.059	2.042.834	313,210	33,297,371	.603.322 3	l	3.438.720	-		1	109,415,917	166,381,019
Capital expenses	194 884	698 836. ਟ	.590 136.	456,039 ு	l	117,514	8.084.301	483	l	47.95	-		1	(2.060.303	28.814.157
Depreciations	62 .218.	3.349.993	.796 151	7.247.595	72.020	69.214	5.663.887	537	l	164,662	-			31 927	17.969.793

The line "Turnover" includes Sales, Service Renount of about 13.139.312Euros (12.226.743 Euros as of December 31, 2017) related to equipment rentals accounted in Other Operating Income (Note 31).

The column "Eliminations" maily includes the elimination of transactions included in consolidation, mainly belonging to Vehides segment.

There is no revenue associated with transactions between the industrial equipment segment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

28. SALES AND SERVICES RENDERED BY GEOGRAPHIC MARKETS

The detail of sales and services rendered by geographic markets, during the years ended as of December 31, 2018 and 2017, was as follows:

	2018		2017
Market	Amount	%	Amount	%
National	383.699.911	85,86%	337.229.617	86,46%
Belgium	47.145.133	10,55%	39.060.407	10,01%
African Countries with Official Portuguese Language	15.493.747	3,47%	12.972.473	3,33%
Spain	59.068	0,01%	100.516	0,03%
United Kingdom	37.108	0,01%	5.283	0,00%
Germany	8.667	0,00%	5.814	0,00%
Others	431.176	0,10%	660.602	0.17%
	446.874.810	100,00%	390.034.711	100.00%

29. EXTERNAL SUPPLIES AND SERVICES

As of December 31, 2018 and 2017, the caption "External supplies and services" was as follows:

	2018	2017
Subcontracts	1.777.920	1.891.529
Specialized Services	19.193.567	20.293.999
Professional Services	6.693.830	5.732.349
Advertising	8.138.044	11.039.464
Vigilance and Security	469.186	503.179
Professional Fees	928.391	815.716
Commissions	514 766	219.528
Repairs and Maintenance	2.449.350	1.983.763
Materials	858.248	897 476
Utilities	3.394.927	3.038.170
Travel and transportation	3.528.700	3.035.556
Traveling expenses	1.905.850	1.589.693
Personnel transportation	99.112	93.692
Transportation of materials	1.523.738	1.352.171
Other supplies	13.560.878	14.072.835
Rent	2.465.913	2.615.226
Communication	716.925	757.750
Insurance	1.510.749	1.306.961
Royalties	446.094	420.680
Notaries	25.650	28.307
Cleaning and comfort	843.864	757.706
Other Services	7.551.683	8.186.205
	42,314,240	43,229,565

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

30. PAYROLL EXPENSES

Payroll expenses are decomposed as follows:

	2018	2017
Payroll Management	582 204	559.153
Payroll Personnel	27.941.095	25.687.992
Benefits Plan	836.970	1.287.735
Termination Indemnities	715.082	884 175
Social Security Contribution	7.275.895	6.896.479
Workmen´s Insurance	470 425	321-748
Others	3.342.526	2.997.262
	41.164.197	38.634.544

During 2018 and 2017, the average number of personnel was as follows:

Personnel	2018	2017
Employees	1.074	1.068
Workers	455	462
	1.529	1.530

31. OTHER OPERATING INCOME AND EXPENSES

As of December 31, 2018 and 2017, the caption "Other operating income" was as follows:

Other operating income	2018	2017
Guarantees recovered and other operating expenses	12.387.595	14.861.331
Lease Equipment	13.101.962	12,220,743
Commissions	4 999 858	3.998.119
Rents charged	3.937.061	3.550.376
Work for the Company	3.525 438	2.702.708
Advertising expenses and sales promotion recovered	4.085.723	2.649.639
Subsidies	2.883.793	2.074.972
Expenses recovered	1.925.722	2.042.402
Services provided	1.960.062	1.768.985
Gains in the disposal Tangible Fixed Assets	1.480.795	582.384
Compensation claims	52.631	47 562
Corrections on the previous exercises	243,405	44.340
	50.584.045	46.543.561

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

From the table presented above, we have:

• Recovery of guarantees and other operational expenses it includes essentially Toyota Motor Europe guarantees and other charges to concessionaires;
• Services provided refers mainly to administrative fees charged to companies outside the Toyota Caetano perimeter;
• Expenses recovery it contains mainly revenues related with social services (canteen and staff training) charged to companies outside the Toyota Caetano perimeter.

As of December 31, 2018 and 2017, the caption "Other operating expenses" was as follows:

Other Operating Income	2018	2017
Taxes	1.143.367	1.037.204
Bad debts	384.280	41.276
Losses in inventories	73.600
Prompt payment discounts granted	6.515	1.158
Losses in other non financial investments	170.258	36.874
Corrections to previous years	21.241	342.943
Donations	332.580	29.722
Subscriptions	27.866	28.297
Fines and penalties	501.021	40.438
Others	1.639.703	983.293
	4.300.431	2.541.205

32. FINANCIAL INCOME AND EXPENSES

Consolidated net financial results as of December 31, 2018 and 2017 were as follows:

Expenses and Losses	2018	2017
Interest	1.691.988	1.860.607
Other Financial Expenses	164.407	748.162
	1.856.395	2.608.769

Income and Gains	2018	2017
Interest	13.813	4.938
Dividends (Cimóvel Fund)	339.700
Other Financial Income	1	28.425
	353.513	33.363

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

As of December 31, 2017, the caption "Other Financial Income" includes derivatives' fair value changes on the amount of 28.425 Euros, ending 22 June,2017.

33. FINANCIAL ASSETS AND LIABILITIES

We summarize in the table below a resume of financial instruments of Toyota Caetano Group as of December 31, 2018 and 2017:

	Financial Assets Note		Financial Liabilities
		2018	2017	2018	2017
Available for sale financial assets	9		3.732.500
Instruments at fair value through capital	9	3.633.413
Accounts Receivable	11	57.203.815	52.192.195
Other Debtors - current	12	2.767.094	3.177.673
Bank Loans	18			39.400.000	56.400.000
Bond Loan	18	1		12.500.000
Leasing	18	-		35.680.425	23.008.943
Overdrafts	18	-		923.669	529 851
Car financing	18	1		2.499.961
Other Creditors	20			1.788.918	1.687.511
Accounts Payable	19			39.907.558	40.256.759
Other current liabilities	22		1	16.740.724	15.098.004
Cash and Cash Equivalents	15	17.075.155	17.267.570
		80.679.477	76,369,968	149,441,255	136.981.068

Financial Instruments at Fair Value

	Note	Financial Assets		Financial Liabilities
		2018	2017	2018	2017
Available for sale financial assets	த		3.732.500
Instruments at fair value through capital	ு	3,633,413		1
		3.633.413	3.732.500	-

Classification and Measurement

	Instruments at fair value through capital		Derivate Financial Instruments	Level
	At fair value	At cost	Cash Flow Hedge Accounting	Negotiation
Cimóvel Fund Others	3.566.677 l	66.736		l	1) 3)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

According to the paragraph 93 of IFRS 13, we provide below, the disclosure of classification and measurement of financial instruments' fair value, by hierarchy level:

• a) Level 1 quoted prices available for sale financial assets: 3.566.677 Euros (3.665.764 Euros in 2017);
• b) Level 2 inputs different from quoted prices included on level 1 that are observable for the asset or liability, both directly (prices), or indirectly - negotiation derivatives (swap);
• c) Level 3 inputs for the asset or liability that are not based on observable market data.

Impact on the Income Statement and Other Comprehensive Income

	Impact on equity			Impact on Income
	2018	2017	2018	2017
Derivate Financial Instruments				(28.425)
Available for sale financial assets		249.372
Instruments at fair value through capital	(99.087)	1
	(99.087)	249,372		(28.425)

34. OPERATIONAL LEASE

During the period of 2018, the minimum payments for operational leases amounted to approximately 3,5 million Euros (5,2 million Euros in 2017). Of that amount, 1,8 million relate to payments with maturity of one year, 1,7 million relate to payments to occur in the period between one to five years and 120 thousand Euros relate to payments of maturity of more than five years.

5.163.892
141.425
3.045.611
1.976.856
2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

RELATED PARTIES 35.

so they will not be disclosed in this Note. Balances and transactions details (through Salvador Caetano Group, S.G.P.S., S.A.) Balances and transactions between the Parent Company and its affiliates, which are related entitles to the consolidation process,

can be summarized as follows:

	Commerci	Debts al	Products		Fixed assets		Services		Others
Company	Receivable	Payable	Sales	Purchases	Purchases	e Receivab	Payable	Sales	Purchases	Purchases
Amorim Brito & Sardinha, Lda,	167									9 0 8 2
Atlântica - Companhia Portuguesa de Pesca, S.A.	5.173									L
Auto Partner Imobiliária, S.A.	1.595	17.749						61 199
Cabo Verde Rent-a-Car, Lda.	103.353	9.133					140.613	85.095
Caetano Active, S.A.	1,008	430	396				9 11 46	.369		27
Caetano Aeronautic, S.A.	56.112	୧୧୨ 8.	548				9 491 28.	310.226	311.829	449,949
Baviera - Comércio de Automóveis, S.A. Caetano	328,816	33.508	3,459,002	504 545			9 45 39.	285,827	608.58.	247 569
City e Active (Norte), S.A. Caetano	338.497	91.763	3,496,594	8.051		348 131	46	103,899	279 244	(45.452)
Drive, Sport e Urban, S.A. Caetano	60.204	83.916	37.702'	11.830			17.772	327.303		528,
Energy, S.A. Caetano	55,784	14.251	11,228	24,002			50.267	14.122		6.692
Fórmula, S.A. Caetano	2,667	185.589	(17,820)	846 454			25,303	(18.659)		1,204
Formula East Africa, S.A. Caetano	2.042									3.738
S.A. Fórmula West Africa, Caetano	330									297
Caetano Motors, S.A.	28,967	76	20.155)	ਟ 84			457 36.	21.911		1.723
Caetano Move Africa, S.A.	84		1.099							ರಿ ನ
aetano One CV, Lda, C	116,632	3,269					372 29	1 015
Parts, Lda. Caetano	123.042	1 408,346	1.833.129	5,572,139			1,977	16.227	2.241	1,318
Power, S.A. aetano C	66.068	30.533	(33.470)	8 69			6 તે છે. 73.	2.152	9 (106.60	513
Retail (S.G.P.S.), S.A. aetano C	233.612	18,648	1.044				1.895	13.327		328.861
Retail España, S.A.U. Caetano										5,635
Squadra Africa, S.A. Caetano	383									379
Star, S.A. Caetano	21 540	1,646	4.107	874				2,394	1.034	28,620
Caetano Technik, Lda,	10.148	24.652	1,834	49,227			21,823	1.487		3,235
CaetanoBus - Fabricação de Carroçarias, S.A.	4,208,338	187,538	90.852	67,876	00 0 ത	4,930	117 448	212,781	9 252.04	526,924 2.
Caetsu Publicidade, S.A.	5.768	682.197	60.059				882 র্ব	467.986 3.	3,255,334	6.833
Carplus - Comércio de Automóveis, S.A.	12.481	2.093	40 442	35.732			86.001	176	450	5.916
Choice Car, S.A.	3.451	758						19.573	19.631	8.303
OCIGA - Construções Civis de Gaia, S.A. C	5,727	433.081		-	185.467		302 റ	227,476	227 476	11.152
OVIM - Soc. Agrícola, Silvícola e Imobiliária, S.A. C	-						-	2.000	2.000
Finlog - Aluguer e Comércio de Automóveis, S.A.	395,828	336.409	1.480.563	377.739			9 13 419.	1.297.800	538.611	58.813
Fundação Salvador Caetano	617,686									21
Grupo Salvador Caetano, (S.G.P.S.), S.A.										9 8
Guérin - Rent-a-Car (Dois), Lda,	498,155	116,193	156,491	148,228			0 1,550,92	8 13,66	10.159	178.262
Hyundai Portugal, S.A.	9.315		8,256	9 ర్			ப 73 39.			46.267
bericar Motors Cádiz, S.L.										385
bericar Reicomsa, S.A.										752
Lidera Soluciones, S.L.		70.016						191,388	71,924
Lusilectra - Veículos e Equipamentos, S.A.	31.522	169.409	48.002	66.455	5,253		68.839	429.329	155.920	60.308

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

	Purchases	6.0	6.082		75 838		252.717	.474	145	24	26			13.437	448	85	117.540	4 434,651
Others	Sales		659.348		251,665	94 742	2,415,788											9.051.418
	rable Pay		866.334		310 152	94.742	3,960,998										9 35 9	12.428.653
Services	e Receivabl		009 8		49,368		168.483										78.097	3.179.650
	Company																	136.278
Fixed assets	Purchases					6.340	26.857											232.917
	Purchases		890.759		648													8.606.134
Products	Sales	32	291		182 50		.020	.994									44.625	10.783.742
Debts	Payable		551.869		332.520	39,655	386.682										1,747	6,342,335
al Commerci	Receivable	2,312	3.737	17.806	125,133		44 794	1.161	ട്ടി	48	31		374	902	38	105	250.084	7,893,183
	Company	MDS Auto - Mediação de Seguros, S.A.	Movicargo - Movimentação Industrial, Lda.	P,O,A,L. - Pavimentacões e Obras Acessórias, S,A,	Portianga - Comércio Internacional e Participações, S,A.	RARCON - Arquitectura e Consultadoria, S.A.	Rigor - Consultoria e Gestão, S.A.	Robert Hudson, LTD	Salvador Caetano Auto Africa, (S.G.P.S.), S.A.	Salvador Caetano Auto. (S.G.P.S.), S.A.	Salvador Caetano Capital, (S.G.P.S.), S.A.	Salvador Caetano Equipamentos, S.A.	SIMÓGA - Sociedade Imobiliária de Gaia, S.A.	Sózó Portugal, S.A.	Turispaiva - Sociedade Turística Paivense, S.A.	VAS Africa (S.G.P.S.), S.A.	Vas Cabo Verde, Sociedade Unipessoal, S.A.

Goods and services purchased and sales to related parties were made at market prices.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

36. CONTINGENT ASSETS AND LIABILITIES

Financial commitments assumed and not included in Consolidated Statement of Financial Position:

As of December 31, 2018 and 2017, Toyota Caetano Group had assumed the following financial commitments:

Commitments	2018	2017
Credits	253.063	96.391
Guarantees of Imports	4.000.000	4.000.000
	4.253.063	4.096.391

At December 31, 2018 and 2017, the financial commitments classified as "Guarantees for Imports" the amount of 4 million Euros is related with guarantees on imports provided to Customs Agency.

Following the 15 million Euros debt contracting, the Group has granted mortgages to the respective financial institutions, valued at about 23,4 million Euros, at the financing date.

Taxes Liquidation:

Toyota Caetano Portugal, S.A.

Litigations in progress

Claim against agency contract termination

The judicial claim presented by a former agent, who was pendent of appeal at the Supreme Court of Justice, was concluded. As conviction of the Board of Directors, no responsibilities were result by the Group.

Judicial claim against collective dismissal

The judicial claim against collective dismissal was completed in 2016 with the existence of agreements. The board and its legal advisors believe that the collective dismissal process occurred in 2012, is based on strong market, structural and technological reasons.

It is conviction of the board that no responsibilities will arise for the Group from the end of this process.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

End of life vehicles

In September 2000, the European Commission approved a Directive regarding end-of-life vehicles and the responsibility of Producers/Distributors for dismantling and recycling them.

Producers/Distributors will have to support at least a significant part of the dismantling of vehicles that went to the market after July 1, 2002, as well as in relation to vehicles produced before this date, but presented as of January 1, 2007.

This legislation will impact Toyota vehicles sold in Portugal. Toyota are closely monitoring the development of Portuguese National Legislation in order to access the impact of these operations in its financial statements.

It is our conviction, in accordance with studies performed on the Portuguese market, and taking in consideration the possible usage of the vehicles parts resulting from the dismantlement, that the effective impact of this legislation in the Group accounts will be reduced or nil.

Meanwhile, and according to the legislation in force (Dec./Law 196/2003), the Group signed with "ValorCar - Sociedade de Gestão de Veículos em Fim de Vida, Lda" - a licensed entity for the management of an integrated system of ELV- the transfer of the liabilities in this process.

Information related to environmental area

The Group adopts the necessary measures relating to the environment, aiming to fulfil current applicable legistation.

The Toyota Caetano Group Board of Directors does not estimate that there are risks related to the environmental protection and improvement, not having received any infraction related to this matter during 2018.

37. REMUNERATION OF BOARD MEMBERS

The remuneration of the board members during the years 2018 and 2017, was as follows:

Board Members	2018	2017
Board of Directors Fixed remunerations	582.204	559.153

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

(Amounts in Euros)

38. REMUNERATION OF STATUTORY AUDITOR

The remuneration of the Statutory Auditor, PricewatherhouseCoopers & Associados - S.R.O.C., Lda. for December 31, 2018 and 2017, was as follows:

	2018	2017
Total fees related statutory audit	55.000	56.575
Total fees related limited account review	3.000	3.000
Total fees related assurance services	1.000	1.000
	59.000	60.575

39. SUBSEQUENT EVENTS

Since the conclusion of the year 2018 and up to date no significant events occurred.

40. FINANCIAL STATEMENTS APPROVAL

The consolidated financial statements were approved by the Board of Directors on March 20, 2019.

According to the Portuguese Commercial Companies Code, it is possible the amended for these Financial Statements, after approval by the Board of Directors.

41. EXPLANATION ADDED FOR TRANSLATION

These financial statements are a translation of financial statements originally issued in Portuguese in accordance with IFRS. In the event of discrepancies, the Portuguese language version prevails.

CHARTERED ACCOUNTANT ALEXANDRA MARIA PACHECO GAMA JUNQUEIRA

BOARD OF DIRECTORS

JOSÉ REIS DA SILVA RAMOS - Chairman MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS KATSUTOSHI NISHIMOTO MATTHEW PETER HARRISON RUI Manuel Machado DE Noronha Mendes

OPINIONS

Report and opinion of the Fiscal Council

Dear Shareholders:

1. In accordance with the terms of item g) of article 420.º of the "Código das Sociedades Comerciais" and the Articles of Association, it is our duty submit to your appreciation the activity performed and to issue opinion regarding the documents of the individual and consolidated accounts of TOYOTA CAETANO PORTUGAL, SA, referring to the financial year of 2018, which were presented to us by the Board of Directors.

2. In accordance with the assignments conferred to us, during this exercise we proceeded to the follow-up of the social business and to its evolution and, with the frequency and extent considered and appropriate, to the general analysis of the financial procedures, accounting policies and measurement criteria adopted by the company.

3. We had analysed and approved the provision of additional services by PricewaterhouseCoopers & Associados - SROC, Lda. for the year 2018.

4. We have no knowledge of any situation which didn't respect the articles of association and the legal terms applicable.

5. We analysed the Individual Legal Certification of Accounts and the Consolidated Legal Certification of Accounts issued by the Statutory External Auditor, with which we agree.

Thus,

1. All members of the Fiscal Council of TOYOTA CAETANO PORTUGAL, S.A., under the terms of item c) of number 1 of article 245.º of the "Código de Valores Mobiliários", hereby declare that, as far as it is their knowledge, the information provided in item a) of the above referred article, including documents of individual and consolidated accounts, was elaborated according to the accounting rules applicable, evidencing a correct and clear image of the assets and liabilities, of the financial situation and results of TOYOTA CAETANO PORTUGAL. SA and that the management report clearly shows the business evolution, the performance and the position of the Company and companies included in its perimeter of consolidation, evidencing as well a description of the mains risks and incertitude's to be faced.

2. And, under the terms of number 5 of article 420.º of "Código das Sociedades Comerciais", the Fiscal Council of TOYOTA CAETANO PORTUGAL, S.A. states that the report on the structure and practices of corporate governance includes the elements referred in article 245.º-A of "Código dos Valores Mobiliários.".

3. Accordingly, we are of the opinion that the Annual General Meeting:

a) Approve the management report of the Board of Directors and the individual and consolidated Accounts related to the financial year ended on the December 31st, 2018;

b) Approve the proposal for the net result application, contained in the management report of the Board of Directors.

Vila Nova de Gaia, 20th March 2019

José Domingos da Silva Fernandes

Alberto Luis Lema Mandim

Daniel Broekhuizen

Statement of the Fiscal Council

All members of the Fiscal Council of TOYOTA CAETANO PORTUGAL, S.A., under the terms of item c) of number 1 of article 245.º of the "Código de Valores Mobiliários", hereby declare that, as far as it is their knowledge, the information provided in item a) of the above referred article, including documents of individual and consolidated accounts, was elaborated according to the accounting rules applicable, evidencing a correct and clear image of the assets and liabilities, of the financial situation and results of TOYOTA CAETANO PORTUGAL, SA and that the management report clearly shows the business evolution, the performance and the position of the Company and companies included in its perimeter of consolidation, evidencing as well a description of the mains risks and incertitude's to be faced.

Vila Nova de Gaia, 20th March 2019

José Domingos da Silva Fernandes

Alberto Luis Lema Mandim

Daniel Broekhuizen

Statutory Audit

(Free translation from the original in Portuguese)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Toyota Caetano Portugal, S.A. (the Entity), which comprise the statement of financial position as at 31 December 2018 (which shows total assets of Euro 284,867,247 and total shareholders' equity of Euro 136,399,907 including a net profit of Euro 12,786,759), the statement of income by nature, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly in all material respects, the financial position of Toyota Caetano Portugal, S.A. as at 31 December 2018, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and other technical and ethical standards and recommendations issued by the Institute of Statutory Auditors. Our responsibilities under those standards are described in the "Auditor's responsibilities for the audit of the financial statements" section below. In accordance with the law we are independent of the Entity and we have fulfilled our other ethical responsibilities in accordance with the ethics code of the Institute of Statutory Auditors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. o' Porto Bessa Leite Complex, Rua António Bessa Leite, 1430 - 5º, 4150-074 Porto, Portugal Tel +351 225 433 000 Fax +351 225 433 499, www.pwc.pt Matriculada na CRC sob o NUPC 506 628 752, Capital Social Euros 314.000 Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na CMVM sob o nº 20161485

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

PricewaterhouseCoopers & Associados de Revisores Oficiais de Contas, Lda, pertence à rede de entidades que são membros houseCoopers International Limited, cada uma das quais é uma entidade legal autónoma e independente. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069-316 Lisboa, Portugal

Key audit matter

Revenue cut-off

Disclosures related with revenue presented in the notes to the financial statements 2.3.n), 23 and 24.

The Company's revenue amounts to Euro 364 million This amount includes Euro 32.7 million referent to sales occurred in December.

According to IFRS 15, revenue is recognized in the income statement when the control is transferred from the seller to the buyer, and this recognition may be effected at one time if the transfer of control takes place on a specific date or over time if that transfer takes place over a certain period of time.

The automatic recognition of revenue is made at the moment of billing issuance. In a moment after that, a manual adjustment is made to the sales related with cars that, at the reporting date, were not delivered to the clients.

This issue is a key audit matter because there is a gap between the billing moment and the moment of the transfer of significant risks and rewards to the client, and also because the mentioned manual adjustment results from a manual procedure.

Summary of the audit approched

In order to mitigate the risk of a cut-off error concerning revenue recognition arising from sales of goods, we have performed the following audit procedures:

• Identification and test of key controls related with revenues and receivables processes;

• Inventory counting assistance and analysis of adjustments made to inventory;

Tests of detail to the cut-off assertion through the verification of delivery notes;

Tests of detail to revenue manual adjustments;

Analytical procedures to the caption sales (variance analysis against last year and budget);

• Verification of disclosures and analysis of the impact of the adoption of IFRS 15.

Key audit matter

Used cars valuation

Disclosures related with inventory presented in the notes to the financial statements 2.3.e) and 11.

The Company presents in the statement of financial position, inventory amounting to Euro 61 million, representing about 21% of total assets. The mentioned amount includes Euro 50 million related with merchandise, which are measured at the lower of average acquisition cost and net realizable value.

The amount of merchandise contains Euro 12.8 million referent to used cars, without any cumulative impairment loss being recognized.

According to IAS 2, merchandise and raw and subsidiary materials are measured at average cost, which is lower that their respective market value. The inventory cumulative impairment losses reflect the difference between the acquisition cost and the net realizable value.

This issue is a key audit matter because of the magnitude of the amount of used cars inventory as well as the judgement inherent to assessment of impairment losses. There is the risk of the amount of recognized cumulative impairment losses not totally reflects the effective loss and that the difference between both amounts is material.

Summary of the audit approched

In order to mitigate the risk of the carrying amount of used cars inventory being greater that their net realizable value, we have performed the following audit procedures:

• Test of detail to the valuation of used cars inventory as of December 31, 2018

• Validation of valuation assumptions, including, among other procedures, analysis of historical commercial information and comparison between the Company's expectations concerning the net realizable value of used cars and market analysts' expectations.

• Assessment of the controls implemented by the Company in order to minimize days in inventory related with used cars.

• Analytical review to margins of used cars as well as to inventory turnover related with used cars.

• Analysis of used cars' sales occurred after December 31, 2018 in order to identify situations in that the net realizable amount is lower than the carrying amount as of December 31, 2018.

Responsibilities of management and supervisory board for the financial statements

Management is responsible for:

a) financial performance and the cash flows of the Entity in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union;

b) accordance with the applicable law and regulations;

c) preparation of financial statements that are free from material misstatement, whether due to fraud or error;

d)

e) events or conditions that may cast significant doubt on the Entity's ability to continue its activities.

The supervisory board is responsible for overseeing the process of preparation and disclosure of the Entity's financial information.

Auditor's responsibilities for the audit of the financial statements

Our responsibility is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

a) to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

b) procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control;

c) estimates and related disclosures made by management;

d) and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Entity to cease to continue as a going concern;

e) the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

f) among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit;

g) supervisory board, we determine which one's were the most important in the audit of the financial statements of the current year, these being the key audit matters. We describe these matters in our report, except when the law or regulation prohibits their public disclosure;

h) regarding independence and communicate all relationships and other matters that may be perceived as threats to our independence and, where applicable, the respective safeguards.

Our responsibility also includes verifying that the information included in the Directors' report is consistent with the financial statements and the verification set forth in paragraphs 4 and 5 of article No. 451 of the Portuguese Company Law, and verifying that the non-financial information was presented.

Report on other legal and regulatory requirements

Director's report

In compliance with paragraph 3 e) of article No. 451 of the Portuguese Company Law, it is our understanding that the Director's report has been prepared in accordance with applicable requirements of the law and regulation, that the information included in the Directors' report is consistent with the audited financial statements and, taking into account the knowledge and assessment about the Entity, no material misstatements were identified. As set forth in paragraph 7 of article No. 451 of the Portuguese Company Law, this opinion is not applicable to the non-financial statement included in the Director's report.

Non-financial statement set forth in article No. 66-B of the Portuguese Company Law

In compliance with paragraph 6 of article No. 451 of the Portuguese Company Law, we hereby inform that the entity included in its Director's report the non-financial statement set forth in article No. 66-B of the Portuguese Company Law.

Corporate governance report

In compliance with paragraph 4 of article No. 451 of the Portuguese Company Law, it is our understanding that the Corporate governance report includes the information required under article No. 245-A of the Portuguese Securities Market Code, that no material misstatements were identified in the information disclosed in this report and that it complies with paragraphs c), d), f), i) and m) of that article.

Additional information required in article No. 10 of the Regulation (EU) 537/2014

In accordance with article No. 10 of Regulation (EU) 537/2014 of the European Parliament and of the Council, of April 16, 2014, and in addition to the key audit matters referred to above, we also provide the following information:

a) April 2010 having remained in functions until the current period. Our last appointment was in the Shareholders' General Meeting of 30 April 2015 for the period from 2015 to 2018.

b) suspicions of fraud with material effect in the financial statements. We have maintained professional scepticism throughout the audit and determined overall responses to address the risk of material misstatement due to fraud in the financial statements. Based on the work performed, we have not identified any material misstatement in the financial statements due to fraud.

c) by us and issued to the Entity's supervisory board as of 20 March 2019.

d) 8 of article No. 77 of the by-laws of the Institute of Statutory Auditors ("Estatutos da Ordem dos Revisores Oficiais de Contas") and that we remain independent of the Entity in conducting our audit.

20 March 2019

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. represented by:

José Miguel Dantas Maio Marques, R.O.C.

Statutory Audit Report

(Free translation from the original in Portuguese)

Report on the audit of the consolidated financial statements

Opinion

We have audited the consolidated financial statements of Toyota Caetano Portugal, S.A. (the Group), which comprise the consolidated statement of financial position as at 31 December 2018 (which shows total assets of Euro 320,052,491 and total shareholders' equity of Euro 137,873,129 including a net profit of Euro 12,786,759), the consolidated statement of income by nature, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly in all material respects, the consolidated financial position of Toyota Caetano Portugal, S.A. as at 31 December 2018, and their consolidated financial performance and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and other technical and ethical standards and recommendations issued by the Institute of Statutory Auditors. Our responsibilities under those standards are described in the "Auditor's responsibilities for the audit of the consolidated financial statements" section below. In accordance with the law we are independent of the entities that are included in the Group and we have fulfilled our other ethical responsibilities in accordance with the ethics code of the Institute of Statutory Auditors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. o' Porto Bessa Leite Complex, Rua António Bessa Leite, 1430 - 5º, 4150-074 Porto, Portugal Tel +351 225 433 000 Fax +351 225 433 499, www.pwc.pt Matriculada na CRC sob o NUPC 506 628 752, Capital Social Euros 314.000 Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na CMVM sob o nº 20161485

PricewaterhouseCoopers & Associados de Revisores Oficiais de Contas, Lda, pertence à rede de entidades que são membros vaterhouseCoopers International Limited, cada uma das quais é uma entidade legal autónoma e independente. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069-316 Lisboa, Portugal

Key audit matters

Summary of the audir approched

Revenue cut-off

Disclosures related with revenue presented in the notes to the consolidated financial statements 2.3.p), 27 and 28.

The Group's revenue amounts to Euro 447 million. This amount includes Euro 38.5 million referent to sales occurred in December.

According to IFRS 15, revenue is recognized in the income statement when the control is transferred from the seller to the buyer, and this recognition may be effected at one time if the transfer of control takes place on a specific date or over time if that transfer takes place over a certain period of time.

The automatic recognition of revenue is made at the moment of billing issuance. In a moment after that, a manual adjustment is made to the sales related with cars that, at the reporting date, were not delivered to the clients.

This issue is a key audit matter because there is a gap between the billing moment and the moment of the transfer of significant risks and rewards to the client, and also because the mentioned manual adjustment results from a manual procedure.

Used cars valuation

Disclosures related with inventory presented in the notes to the consolidated financial statements 2.3.e) and 10.

The Group presents in the consolidated statement of financial position, inventory amounting to Euro 99 million representing about 31% of total assets. The mentioned amount includes Euro 90 million related with merchandise, which are measured at the lower of average acquisition cost and net realizable value.

The amount of merchandise contains Euro 44.1

In order to mitigate the risk of a cut-off error concerning revenue recognition arising from sales of goods, we have performed the following audit procedures:

• Identification and test of key controls related with revenues and receivables processes;

• Inventory counting assistance and analysis of adjustments made to inventory;

• Tests of detail to the cut-off assertion through the verification of delivery notes;

• Tests of detail to revenue manual adjustments;

• Analytical procedures to the caption sales (variance analysis against last year and budget);

• Verification of disclosures and analysis of the impact of the adoption of IFRS 15.

In order to mitigate the risk of the carrying amount of used cars inventory being greater that their net realizable value, we have performed the following audit procedures:

• Test of detail to the valuation of used cars inventory as of December 31, 2018

• Validation of valuation assumptions, including, among other procedures, analysis of historical commercial information and comparison between

Key audit matters	Summary of the audir approched
million referent to used cars, being the respective cumulative impairment losses of Euro 2 million.	the Group's expectations concerning the net realizable value of used cars and market analysts' expectations.
According to IAS 2, merchandise and raw and subsidiary materials are measured at average cost, which is lower that their respective market value. The inventory cumulative impairment losses reflect the difference between the	- Assessment of the controls implemented by the Group in order to minimize days in inventory related with used cars.
acquisition cost and the net realizable value.	- Analytical review to margins of used cars as well as to inventory turnover related with used cars.
This issue is a key audit matter because of the magnitude of the amount of used cars inventory as well as the judgement inherent to assessment of impairment losses. There is the risk of the amount of recognized cumulative impairment losses not totally reflects the effective loss and that the difference between both amounts is material.	- Analysis of used cars' sales occurred after December 31, 2018 in order to identify situations in that the net realizable amount is lower than the carrying amount as of December 31, 2018.

Responsibilities of management and supervisory board for the consolidated financial statements

Management is responsible for:

a) position, the financial performance and the cash flows of the Group in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union;

b) accordance with the applicable law and regulations;

c) preparation of financial statements that are free from material misstatement, whether due to fraud or error;

d)

e) events or conditions that may cast significant doubt on the Group's ability to continue its activities.

The supervisory board is responsible for overseeing the process of preparation and disclosure of the Group's financial information.

Auditor's responsibilities for the audit of the consolidated financial statements

Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

a) whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

b) procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control;

c) estimates and related disclosures made by management;

d) and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern;

e) statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

f) or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion;

g) among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit;

h) supervisory board, we determine which one's were the most important in the audit of the consolidated financial statements of the current year, these being the key audit matters. We describe these matters in our report, except when the law or regulation prohibits their public disclosure;

i) regarding independence and communicate all relationships and other matters that may be perceived as threats to our independence and, where applicable, the respective safeguards.

Our responsibility also includes verifying that the information included in the Directors' report is consistent with the consolidated financial statements and the verification set forth in paragraphs 4 and 5 of article No. 451 of the Portuguese Company Law, and verifying that the non-financial information was presented.

Report on other legal and regulatory requirements

Director's report

In compliance with paragraph 3 e) of article No. 451 of the Portuguese Company Law, it is our understanding that the Director's report has been prepared in accordance with applicable requirements of the law and regulation, that the information included in the Directors' report is consistent with the audited consolidated financial statements and, taking into account the knowledge and assessment about the Group, no material misstatements were identified. As set forth in paragraph 7 of article No. 451 of the Portuguese Company Law, this opinion is not applicable to the non-financial statement included in the Director's report.

Non-financial statement set forth in article No. 508-G of the Portuguese Company Law

In compliance with paragraph 6 of article No. 451 of the Portuguese Company Law, we hereby inform that the entity included in its Director's report the non-financial statement set forth in article No. 508-G of the Portuguese Company Law.

Corporate governance report

In compliance with paragraph 4 of article No. 451 of the Portuguese Company Law, it is our understanding that the Corporate governance report includes the information required under article No. 245-A of the Portuguese Securities Market Code, that no material misstatements were identified in the information disclosed in this report and that it complies with paragraphs c), d), f), i) and m) of that article.

Additional information required in article No. 10 of the Regulation (EU) 537/2014

In accordance with article No. 10 of Regulation (EU) 537/2014 of the European Parliament and of the Council, of April 16, 2014, and in addition to the key audit matters referred to above, we also provide the following information:

a) We were first appointed auditors of Toyota Caetano Portugal, S.A. in the Shareholders' General Meeting of 23 April 2010 having remained in functions until the current period. Our last appointment was in the Shareholders' General Meeting of 30 April 2015 for the period from 2015 to 2018

b) suspicions of fraud with material effect in the financial statements. We have maintained professional scepticism throughout the audit and determined overall responses to address the risk of material misstatement due to fraud in the consolidated financial statements. Based on the work performed, we have not identified any material misstatement in the consolidated financial statements due to fraud.

c) by us and issued to the Group's supervisory board as of 20 March 2019.

d) 8 of article No. 77 of the by-laws of the Institute of Statutory Auditors ("Estatutos da Ordem dos Revisores Oficiais de Contas") and that we remain independent of the Group in conducting our audit.

20 March 2019

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. represented by:

José Miguel Dantas Maio Marques, R.O.C.

REMUNERATION COMMITTEE DECLARATION:

The Remuneration Committee of Toyota Caetano Portugal, S.A states the following:

a) Compliance with the policy set defined for Financial Year of 2018:

Analyzed all accounting data and other records of Toyota Caetano Portugal, this Committee verified that the changes occurred in the remuneration of the Governing Bodies during the year 2018 complied with the proposals of this Committee approved in the General Meeting of Shareholders of April 20, 2018.

b) Policy of Remuneration applicable during the Financial Year 2019:

In view of the current economic climate and given the forecasts of activity and results for the financial year 2019, provided by the Management of the Company, it is the understanding of this Committee that the amounts of remuneration of the fixed nature for all members of the governing bodies, who maintain executive functions, must respect in its essence the deliberations of the Management concerning the salary policy to be applied to the remaining Employees, in other words, they must in 2019 be updated in a range between 1,5% to 3%.

For the non-Executive, this Committee has the opinion that they shall not receive any remuneration, as it is the practice hitherto followed.

Regarding the Variable Remuneration of the executive members of the Board of Directors, it has been allocated according to the results obtained by the Company, combining with the distribution policy of dividends to the shareholders and the bonus payable to employees.

In 2018, when this remuneration component was attributed, was met the Commission's proposal of not exceeding 2% of the distributable results.

Therefore and referring to paragraph b) of number 3 of article 2 of Law 28/2009 of 19 June, this Remuneration Committee proposes the maintenance of this criteria for 2019, namely that the variable remuneration of the Executive Members of the Board of Directors as a whole does not exceeds 3% of the distributable profits determined in the financial year of 2018.

The decision to award Variable Remuneration depending on the results obtained has implicit the verification of the alignment of interests of the members of the Board of Directors with the interests of the Company and, therefore, is one of the mechanisms to be integrated in paragraph a) of number 3 of article 2 of Law No. 28/2009 of 19 June and simultaneously responding to paragraph e) of the same number of article 2 of Law No.28/2009, ensuring the limitation of the variable remuneration in the case that the results obtained are of a negative nature.

Concerning the information related to paragraph c) of number 3 of article 2 of Law No. 28/2009 of June 19, we certify the absence of any plan of allocation of shares or options to acquire shares by the members of the administration and supervision. This committee proposes to maintain this criterion.

The company's practice in the timing of annual payments must, in our opinion, remain, and therefore shall be excluded the possibility stated in paragraph d) of number 3 of article 2 of Law No. 28/2009.

The Remuneration Committee

Alberto Luis Lema Mandim Maria Conceição Monteiro da Silva Francelim Costa da Silva Graça